Expand TEEM subsidy to the spinning and cotton ginning segments, urge textile mills

Textile manufacturers across India are urging the Union government to include the Textile Expansion and Employment (TEEM) scheme for spinning and cotton ginning segments. While the government-backed initiative aims to catalyze industry-wide modernization, current sector leaders argue, without targeted capital subsidies for these foundational stages, competitiveness remains compromised by outdated machinery. Industry data underscores a productivity gap: the cost of producing one kilogram of yarn in a modern mill is approximately Rs 1.2, compared to Rs 1.8 in facilities operating on decadal-old technology.

Technical audits reveal, nearly 26 per cent of India’s installed spindles have exceeded 25 years in operation, limiting the ability to match the pricing agility of competitors in Bangladesh and Vietnam. Technology remains the primary lever for global alignment; current mills leveraging automation observe 25 per cent higher productivity and 20 per cent improvements in quality, notes a senior industry representative. The requested intervention includes a 20 per cent capital subsidy and a 7 per cent interest subvention over five years to facilitate a transition toward high-efficiency equipment. By addressing these structural bottlenecks, mills believe, they can slash energy consumption by 15 per cent, ultimately strengthening the domestic value chain's capacity to reach the ambitious $350 billion industry target by 2030.

The Ministry of Textiles launched the TEEM scheme in 2026 as part of an integrated program to boost manufacturing competitiveness. The scheme focuses on upgrading traditional textile clusters through financial support for machinery and technology. It targets increased export capacity, quality compliance, and large-scale employment generation across the entire textile value chain.