Andhra Pradesh Textile, Apparel and Garments Policy 4.0 (2024-29)
Why the policy exists
AP TAG 4.0 — investment subsidy of up to 55% of eligible FCI for MSMEs (value-added activity, special category) and up to 30% for Large units, with Early Bird investment subsidy of up to 40% of eFCI under AP IDP 4.0, PLI top-ups, employment subsidy of up to 10% of FCI, ₹2/unit power cost reimbursement, de-carbonisation capital subsidy, local procurement subsidy for exporters, and 100% stamp duty & land-conversion reimbursement — focused on weaving, knitting, processing, garmenting, technical textiles and integrated units
The Andhra Pradesh Textile, Apparel and Garments Policy (AP TAG) 4.0 2024-29 replaces the 2018-23 policy — which was never implemented for want of operational guidelines — and targets the State's biggest structural gap: AP is India's 6th largest cotton producer (15.41 lakh bales in 2022-23, ~106 spinning mills with ~3 lakh spindles, 12,635 power looms), yet weaving, processing and garmenting remain underdeveloped, causing yarn and grey fabric to migrate out of the State for value addition. The policy attracts investment into weaving, knitting, preparatory, processing, garmenting, apparel, integrated units and technical textiles to complete the farm-to-fabric value chain within AP.
Objectives
- •Complete the entire textile value chain within the State and prevent value migration.
- •Nudge the sector towards the sunrise segment of Technical Textiles.
- •Promote AP as a major destination for global textile brands.
- •Sustainable development with least environmental impact; circularity in textiles.
- •Scale up MSMEs, move up the value chain and create global brands.
Quantified Targets (5-Year Period)
| Parameter | Target |
|---|---|
| New investment attraction | ₹10,000 Crore in the sector |
| Employment generation | More than 2 Lakh direct and indirect jobs |
| Textile exports from the State | USD 1 Billion (more than double from FY23 exports of USD 428 Million) |
| Value chain | End-to-end textile processing & manufacturing within the State |
Who qualifies, and in which band
Applicability
- •New and existing enterprises investing in and establishing new units.
- •Existing enterprises investing in expansion/upgradation of units.
- •The enterprise must obtain Consent for Operation (CFO) approval and commence commercial production during the operative period of the Policy (unless exempted through a G.O.) to claim incentives.
Investment Bands
| Category | Definition |
|---|---|
| Micro | Plant & Machinery/Equipment ≤ ₹1 Crore and annual turnover ≤ ₹5 Crore (GoI definition, as revised from time to time) |
| Small | P&M/Equipment ≤ ₹10 Crore and turnover ≤ ₹50 Crore |
| Medium | P&M/Equipment ≤ ₹50 Crore and turnover ≤ ₹250 Crore |
| Sub-Large Projects | Investment above ₹50 Crore and up to ₹100 Crore |
| Large Projects | Investment above ₹100 Crore and up to ₹200 Crore |
| Mega Projects | Investment above ₹200 Crore — tailor-made incentives |
Incentive quantum for Micro, Small & Medium units
A. Investment Subsidy (New Enterprises Only)
| Category | General Category | Special Category |
|---|---|---|
| Micro | 30% of eFCI (Cap ₹3 Cr) | 45% of eFCI (Cap ₹3 Cr) |
| Small | 30% of eFCI (Cap ₹3 Cr) | 45% of eFCI (Cap ₹3 Cr) |
| Medium | 30% of eFCI (Cap ₹10 Cr) | 45% of eFCI (Cap ₹10 Cr) |
| Value-Added Activity (all MSMEs) | 40% of eFCI (Cap ₹20 Cr) | 55% of eFCI (Cap ₹20 Cr) |
- •Additional subsidy of 15% of eFCI for Special Category enterprises (reflected in the Special Category column above).
- •Disbursement: 2 / 3 / 4 equal instalments (Micro / Small / Medium) from the date of commercial production.
B. Technology Upgradation Subsidy (Existing Enterprises Only)
| Category | General Category | Special Category |
|---|---|---|
| Micro | 30% of eFCI (Cap ₹2 Cr) | 45% of eFCI (Cap ₹2 Cr) |
| Small | 30% of eFCI (Cap ₹2 Cr) | 45% of eFCI (Cap ₹2 Cr) |
| Medium | 30% of eFCI (Cap ₹7.5 Cr) | 45% of eFCI (Cap ₹7.5 Cr) |
For technology upgradation, expansion or diversification; disbursed in 2/3/4 equal instalments from DCP.
C. Energy/Water Audit & Green Tech Adoption
| Support | Micro | Small | Medium |
|---|---|---|---|
| Water audit cost | 75%, cap ₹1 Lakh | 75%, cap ₹1 Lakh | 75%, cap ₹1 Lakh |
| Energy audit cost | 75%, cap ₹2 Lakh | 75%, cap ₹2 Lakh | 75%, cap ₹2 Lakh |
| Equipment cost as per audit | 25%, cap ₹20 Lakh | 25%, cap ₹40 Lakh | 25%, cap ₹50 Lakh |
D. Power Cost Reimbursement & Electricity Duty
| Category | Power Subsidy | Period |
|---|---|---|
| Micro | ₹2 per unit (Cap ₹2 Lakh) | 6 years from DCP |
| Small | ₹2 per unit (Cap ₹10 Lakh) | 6 years from DCP |
| Medium | ₹2 per unit (Cap ₹30 Lakh) | 6 years from DCP |
Plus 50% exemption on electricity duty for 6 years from DCP.
E. Skill Upgradation, Quality Certification & Local Procurement
| Incentive | Micro | Small | Medium |
|---|---|---|---|
| Skill upgradation | ₹5,000/person, max 10 persons | ₹10,000/person, max 20 persons | 100% employer EPF contribution, cap ₹1 Lakh p.a., for 3 years |
| Local procurement subsidy (export units, ≥60% domestically sourced inputs) | 1% of annual turnover for 3 years, overall cap ₹15 Lakh | 1% of annual turnover for 3 years, overall cap ₹1.5 Cr | 1% of annual turnover for 3 years, overall cap ₹7 Cr |
Quality certification assistance: any balance amount not exceeding the matching GoI assistance, incurred for obtaining quality certifications, will be reimbursed (dovetailing with GoI schemes).
Incentive quantum for ₹50–200 Crore projects
A. Investment Subsidy (New / Expansion / Diversification)
| Category | General Category | Special Category | Disbursement |
|---|---|---|---|
| Sub-Large (₹50–100 Cr) | 20% of eFCI (Cap ₹20 Cr) | 25% of eFCI (Cap ₹20 Cr) | 4 equal instalments from DCP |
| Large (₹100–200 Cr) | 25% of eFCI (Cap ₹50 Cr) | 30% of eFCI (Cap ₹50 Cr) | 5 equal annual instalments from DCP |
The Special Category uplift for Sub-Large & Large units is +5% of FCI (vs +15% at MSME level).
B. Early Bird Incentive (via AP IDP 4.0)
- •Weaving, Processing, Garments and Technical Textiles qualify as Category II projects under the Early Bird scheme of AP Industrial Development Policy 4.0.
- •First 200 early applicants (across all sectors) obtaining CFE within 18 months from the policy's effective date: investment subsidy of 30% of eFCI.
- •Category II projects receiving CFE within 24 months: 40% of eFCI.
- •The Early Bird subsidy, if availed, overrides the investment subsidy under AP TAG 4.0.
C. Top-Up for PLI-Approved Applicants
- •Additional to the investment subsidy, for projects approved under the GoI PLI scheme (or other notified GoI schemes).
- •Quantum: 10% of the incentives sanctioned under the GoI scheme, capped at 5% of FCI in the State; eligible only to the extent of investment committed to GoI and proportionate FCI made in AP.
- •Disbursed in 5 equal annual instalments from DCP.
D. Capital Subsidy for De-carbonisation Measures
| Category | Non-Red Category (% of eligible project cost) | Red Category (% of eligible project cost) | Maximum Incentive |
|---|---|---|---|
| Sub-Large | 10% | 15% | 6% of FCI (de-carbonisation project cost itself capped at 6% of total FCI) |
| Large | 20% | 25% | 6% of FCI (de-carbonisation project cost itself capped at 6% of total FCI) |
Covers clean production, waste reduction, energy efficiency, green energy and safety measures for captive use.
E. Employment-Based Incentive
| Employment/Investment (E/I) Ratio* | Eligible Incentive |
|---|---|
| 5 and above | 10% of FCI |
| ≥ 3 and < 5 | 9% of FCI |
| ≥ 1 and < 3 | 8% of FCI |
| Less than 1 | NIL |
*“E” = employment created; “I” = investment in ₹ Crore. Disbursed in equal annual instalments over 5 years from DCP.
F. Power, Electricity Duty & Local Procurement
| Incentive | Sub-Large | Large |
|---|---|---|
| Power cost reimbursement (6 years from DCP) | ₹2 per unit (Cap ₹1 Cr) | ₹2 per unit (Cap ₹2 Cr) |
| Electricity duty exemption | 50% for 6 years from DCP | 50% for 6 years from DCP |
| Local procurement subsidy | 1% of annual turnover, cap ₹2 Cr per annum, claimable annually for 3 years from DCP or within the policy period, whichever is earlier | 1% of annual turnover, cap ₹2 Cr per annum, claimable annually for 3 years from DCP or within the policy period, whichever is earlier |
Across-the-board benefits and tailor-made packages
Other Incentives (All Eligible Units)
- •Stamp Duty: 100% stamp duty and transfer duty on purchase of land for industrial use; 100% stamp duty on lease of land/shed/buildings, mortgages and hypothecations — reimbursed only once on the land, not on subsequent transactions.
- •Land Conversion Charges: 100% of the fee charged for land conversion reimbursed.
- •Revival of Sick Units: Government will investigate sick enterprises and extend support/revival measures on a case-to-case basis.
Tailor-Made Incentives (Mega Projects > ₹200 Crore)
Projects with investment above ₹200 Crore receive tailor-made incentives on a case-to-case basis — evaluated on the pioneering nature of the project, value addition, strategic importance, contribution to the State's textile sector growth, and large-scale employment generation. SIPC advises SIPB on tailor-made packages; final approval rests with SIPB.
Support to Research Institutes
The Government will support establishment of Textile, Apparel and Garments Technology and Research Institutes in coordination with leading educational/research institutions and industry — with financial, infrastructure and other support, dovetailing with GoI schemes wherever applicable.
Bodies governing the policy
| Body | Role |
|---|---|
| State Investment Promotion Board (SIPB) | Chaired by the Chief Minister; Chief Secretary as Member Convener. Meets monthly for final decisions on investments/promotion activities and approval of Mega projects. |
| State Investment Promotion Committee (SIPC) | Chaired by the Chief Secretary; convened by Commissioner of Industries. Meets monthly to review the single desk system, investment facilitation and project grounding, implementation of large/mega projects, screening of mega proposals, and issues meriting SIPB consideration. Advises SIPB on changes/amendments and tailor-made incentive recommendations — final decision rests with SIPB. |
Implementation: The Director of Industries, A.P., Mangalagiri drafts the operating guidelines; incentives are extended as per guidelines to be notified by the Commissioner of Industries separately. Policy issued with the concurrence of the Finance Department (U.O.No.FIN01-FMU0ASD(IC)/8/2024).
Key dates and durations
| When | What |
|---|---|
| 12/09/2018 | Earlier Textile, Apparel and Garments Policy 2018-23 notified vide G.O.Ms.No.105 — but never implemented, as operational guidelines were not issued. |
| 11/12/2024 | AP TAG 4.0 (2024-29) notified vide G.O.MS.No.89, Industries & Commerce (Prog.II) Department; in operation from the date of issue of the order. |
| 5 years | Policy validity from the date of the G.O., or till a new policy is announced, whichever is later. Amendments apply prospectively and cannot curtail benefits already granted. |
| 18 / 24 months | Early Bird CFE windows under AP IDP 4.0 — 18 months (first 200 applicants, 30% of eFCI) and 24 months (Category II textile projects, 40% of eFCI) from the effective date of that policy. |
| 2–5 instalments | Investment subsidy disbursement from DCP — 2 (Micro), 3 (Small), 4 (Medium/Sub-Large), 5 (Large). |
| To be notified | Operational guidelines for AP TAG 4.0 by the Department of Industries; separate operating guidelines also approved for units established under the 2018-23 policy to claim their eligible incentives. |