Chennai: Tamil Nadu Chief Minister MK Stalin on Thursday announced a major 20% capital subsidy for the modernisation of the state’s pivotal textile industry,
aimed at boosting global competitiveness. The subsidy will support the purchase of state-of-the-art weaving, knitting, and garment machinery, with an annual allocation of ₹30 crore under the newly released Integrated Textile Policy for 2025-26.
New Textile Policy & Subsidy Aim to Cement TN’s Leadership, Counter US Tariffs
Announcing the policy via video conference at the International Textile Conference in Coimbatore, Stalin highlighted Tamil Nadu’s dominance in the sector. The state accounts for 33% of India’s total textile trade and has been the largest exporter of ready-made garments for five consecutive years. The industry provides direct employment to 31 lakh workers, over 60% of whom are women.
The policy and subsidy are strategic moves to help the industry navigate challenges like the 50% tariff imposed by the US and the 11% import duty on cotton. Stalin stated the government is actively identifying new markets and urging the Centre to remove the cotton duty. The initiatives are also timed to leverage opportunities from the impending India-European Union Free Trade Agreement, aiming to attract international investment.
Rs. 915 Crore MoUs Signed at Conference as Part of Broader Investment Push
The Chief Minister underscored the government’s focus on the textile sector, which led to the creation of a separate Department of Textiles. He noted that previous investor conferences in Coimbatore, Madurai, and Thoothukudi had already garnered investments worth ₹9,764 crore. At the current conference, 55 Memoranda of Understanding (MoUs) worth ₹915 crore are being signed.
Inviting global entrepreneurs, Stalin emphasised Tamil Nadu’s “excellent infrastructure” and its proven record in ensuring inclusive growth under the “Dravidian Model” of governance. The new capital subsidy is designed to enable textile units to upgrade technology, enhance productivity, and secure a stronger position in the global value chain.
