2025 Schemes for MSMEs in Textile, Handloom & Apparel Sectors

Government’s 2025 Push for Textile-Led Growth

In 2025, India’s micro, small, and medium enterprises (MSMEs) in the textile, handloom, and apparel sectors are emerging as key drivers of the country’s industrial and export expansion. Recognising their vast employment potential and global competitiveness, the Government of India has introduced a range of targeted schemes to strengthen every link of the textile value chain — from raw material supply and production to skill building, innovation, and export facilitation.

The focus is clear: to modernise traditional practices, boost sustainability, and position Indian MSMEs as global leaders in high-quality textile and apparel manufacturing. Here’s a detailed look at the major government initiatives of 2025, organised by key focus areas.


1. Infrastructure & Manufacturing Support


PM MITRA Parks (Mega Integrated Textile Region and Apparel Parks)

The PM MITRA scheme stands out as one of the most transformative initiatives for India’s textile sector. Seven world-class mega textile parks are being developed across the country to create an end-to-end textile ecosystem — from fibre to fashion — under one roof.

Each park provides plug-and-play manufacturing units, advanced design and testing facilities, and shared utilities like power, water, and effluent treatment plants. For MSMEs, these parks eliminate the need for heavy capital investment in infrastructure while ensuring access to modern facilities and global-quality production standards.

The initiative is expected to attract large-scale private investment, create thousands of jobs, and strengthen India’s position in the global textile supply chain.


Amended Technology Upgradation Fund Scheme (ATUFS)


The ATUFS continues to drive technological modernisation across textile MSMEs. Offering 10–15% capital subsidy on investments in advanced machinery, it enables small and medium enterprises to upgrade equipment, improve efficiency, and reduce wastage.

With automation and sustainable production at its core, the scheme helps Indian textile units enhance quality and remain competitive in both domestic and export markets.


Scheme for Integrated Textile Parks (SITP) & PowerTex India

The SITP provides up to 40% grant support (up to ₹40 crore) for developing textile clusters with shared infrastructure. This benefits MSMEs operating in smaller clusters by lowering operational costs.

Meanwhile, the PowerTex India scheme focuses on powerloom units, promoting modernisation, solar power adoption, and technology upgradation — especially in rural and semi-urban weaving centres.


2. Production Incentives & Value Addition


PLI Scheme for Textiles (PLI 2.0)

At the core of India’s 2025 textile growth vision is the Production Linked Incentive (PLI) Scheme. Its revised version, PLI 2.0, makes entry easier for MSMEs by reducing investment thresholds and expanding the range of eligible products.

Targeting man-made fibre (MMF) fabrics, apparel, and technical textiles, the scheme offers performance-linked incentives on incremental sales, encouraging MSMEs to scale production and enter new global markets.

By focusing on innovation-driven and sustainable textile products, PLI 2.0 helps MSMEs transition from labour-intensive models to high-value, technology-led manufacturing.


Other Incentives for MSMEs

  • Export Promotion Capital Goods (EPCG) – Allows import of machinery at zero customs duty for export-oriented textile units.
  • Investment Promotion Scheme (IPS) – Offers interest subsidies for credit-linked capital investments.
  • National Technical Textiles Mission (NTTM) – Funds R&D in specialised textile categories like agro, medical, and geo-textiles.
  • State-Level Capital Subsidies – Many states offer additional incentives for expansion and modernisation.

Together, these programs enable MSMEs to move up the value chain and expand into high-demand global textile segments.


3. Raw Materials & Handloom Support


Raw Material Supply Scheme (RMSS)

Renamed from the Yarn Supply Scheme, RMSS ensures continuous access to affordable, high-quality yarn for weavers and small textile units. This safeguards handloom MSMEs from price fluctuations and supply disruptions.

The scheme benefits cooperative societies and individual weavers, ensuring stable income and improved productivity, especially in rural and traditional handloom hubs.


Handloom Development Schemes

A suite of complementary programs supports the traditional handloom ecosystem:

  • National Handloom Development Programme (NHDP) – Assists in design, technology, and marketing.
  • Comprehensive Handloom Cluster Development Scheme (CHCDS) – Provides up to ₹30 crore for mega clusters such as Varanasi and Sivasagar.
  • Small Cluster Development Programme (SCDP) – Offers up to ₹2 crore for small cluster infrastructure.
  • Handloom Weavers’ Comprehensive Welfare Scheme (HWCWS) – Covers insurance and welfare benefits.
  • Star Weaver Mudra Scheme – Provides subsidised credit to promote entrepreneurship among artisans.

These initiatives protect livelihoods, preserve India’s craft heritage, and help weavers integrate into modern supply chains through design innovation and e-commerce.


4. Skill Development & Innovation


Samarth Scheme

The Samarth Scheme continues to bridge the industry’s skill gap by providing structured training in areas such as stitching, pattern making, machine operation, and quality management.

With a strong emphasis on women’s participation and rural employment, Samarth ensures that MSMEs gain access to a skilled and job-ready workforce, enhancing productivity across textile and apparel units.


GREAT Scheme (Grant for Research & Entrepreneurship across Aspiring Innovators in Technical Textiles)

The GREAT Scheme supports startups and MSMEs engaged in R&D for technical textiles — including innovations for defence, medical, and geo-textile applications. It provides grants to turn prototypes into market-ready products, promoting entrepreneurship and export diversification.

Together, Samarth and GREAT underline India’s shift toward innovation-led, knowledge-driven textile growth.


5. Credit Access & Digital Empowerment


Bharat Trade Net

A new-age digital platform, Bharat Trade Net, simplifies global trade documentation for MSMEs. It digitises export processes, connects Indian manufacturers with overseas buyers, and reduces bureaucratic bottlenecks.

This initiative is especially valuable for textile MSMEs aiming to expand exports efficiently while maintaining compliance and transparency.


Financial & Credit Schemes

Access to affordable credit remains central to MSME growth. The government continues to enhance funding through key financial mechanisms:

  • Pradhan Mantri Mudra Yojana (PMMY) – Collateral-free loans up to ₹10 lakh for micro and small enterprises.
  • Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) – Enables collateral-free loans up to ₹2 crore.
  • MSME Credit Cards (Budget 2025–26) – Provide up to ₹5 lakh in easy credit for Udyam-registered businesses.
  • ZED (Zero Defect, Zero Effect) Certification – Rewards sustainable and quality manufacturing.
  • Udyam Registration / Assist – Simplifies access to all government schemes and benefits.

These reforms ease liquidity pressure, enabling MSMEs to invest, expand, and export with confidence.


6. Sectoral Synergies and Way Forward

The 2025 policy ecosystem promotes strong synergies across textile sub-sectors:

  • Technical Textiles: PLI, GREAT, and NTTM are driving R&D and innovation in high-value products like protective and medical fabrics.
  • Handloom: RMSS and NHDP safeguard artisans while integrating traditional crafts into modern markets.
  • Apparel: PM MITRA, PLI, and Samarth combine to build a world-class, export-oriented apparel ecosystem.

For MSMEs, these schemes offer opportunities to scale sustainably, digitalise operations, and expand globally.


Final Thoughts

The year 2025 marks a defining moment for India’s textile, handloom, and apparel MSMEs. With robust government support across infrastructure, finance, skills, and innovation, these enterprises are positioned to transform the nation into a global textile hub.

By strategically leveraging these initiatives — from PM MITRA and PLI 2.0 to Samarth and GREAT — MSMEs can modernise operations, embrace sustainability, and unlock global opportunities.

As India weaves its next industrial chapter, these schemes stand as a blueprint for inclusive, innovation-driven, and globally competitive growth — where tradition meets technology and craft meets commerce. 

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