technology upgradation scheme: Invest in tech: Know more about the Technology Upgradation …

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By HKL Magu

Appropriate technological access and a suitable scale of production are important for any garment manufacturer to achieve and maintain a competitive edge in global businesses. Use of updated and internationally benchmarked technology assures world class production quality, which is now imperative to be able to stay in the export business. There are amazing advancements being made in apparel manufacturing tech and many of these can have very positive benefits for your business.

With Apparel 4.0 around the corner, modern tools like 3 D printing, laser cutting of garments and robots are increasingly making their way into the production shop floors.

The most obvious advantages of investing in technology include speed, quality, innovation and efficiency, which in turn lead to an edge over competition and promote expansion. With speed to market, product diversification, safety and sustainability being the buying mantras of apparel brands these days, exploiting these advantages is certainly the best way forward.

It may benefit all export houses, whether big or small, to earmark an annual fund for technology up-gradation in their yearly budget. New technology does not come cheap. The costs involved can be huge, not only in monetary terms, but, also in terms of the cannibalising effect they can have on some legacy operations. While you may be forced to reconsider your existing business model or your employees may have to be shaken out of their comfort zones to relearn and reorient their approach towards work, the effort will be well worth it.

Over the past few years, the government has been supportive of infusing new technology into the apparel manufacturing sector. Schemes have been made and improved continuously to assist all manufacturers, especially the medium and small scale enterprises in making technology investments. Amended Technology Upgradation Scheme (ATUFS) was envisaged, as early as 2009, by the Ministry of Textiles as a vehicle for growth and modern development of the textile and garment industry. ATUFS provides one time capital subsidy on investment in labour intensive segments and garment manufacturing and design studios fall into this category.

A subsidy of upto Rs 20 crore to Rs 30 crore can be availed under this scheme by enterprises. ATUFS is implemented across two broad categories, wherein, the garment manufacturing sector has been given a clear preferential advantage. For apparel/ garment and technical textiles subsectors, a subsidy of upto 15 per cent is provided on capital investment, subject to a ceiling of Rs 30 crore over five years, whereas, for other subsectors, the subsidy is upto 10 per cent with a ceiling of Rs. 20 crore.

The scheme has been modified several times to improve its ease of adoption by businesses. The most recent amendment, as recent as in August 2018, is available
here. It is important for a manufacturer to refer to the latest scheme, in its complete detail to avail the benefits seamlessly.

While the scheme has been improving continually, the last amendment has improved the ease of application and reimbursement of funds drastically. There are many easy to adopt factors of the scheme, which include the following:

  • An indicative list of machine manufacturers is given for the benefit of the subscriber
  • Permission to avail benefits of state government schemes in addition to ATUFS
  • Not only the mainstream machines, but also machines used for accessories and sampling are included under the scheme
  • Every year on April 1, the specifications of technology included under the scheme are prescribed in advance
  • The scheme is credit linked, which implies that the capital investment subsidy shall be available on term loan from a notified lending agency, with minimum 50 per cent of the total eligible machinery cost. The CIS will be released in full in one go upon successful installation of the machinery.
  • The applicant may submit their application online through official site. The government has ensured a seamless, transparent, digital procedure to avail the scheme and its benefits.

HKL Magu is Chairman, AEPC and Managing Director, Jyoti Apparels, India. You can reach him on chairman@aepcindia.com or his twitter handle- hkl magu (@hkl_magu). You can read more about him and AEPC on www.aepcindia.com. You may also follow AEPC on facebook at https://www.facebook.com/groups/874313962708750/.



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