In the context of the liberalisation of the national industries and trade policies and globalisation of textile trade and in order to provide a focal point for modernisation efforts through upgradation in the textile industry, a scheme namely Technology Upgradation Fund Scheme (TUFS) is operationalised with effect from April 1, 1999 for a period of five years.
Technology upgradation would ordinarily mean induction of state-of-the-art technology or near state-of-the-art technology, with a view to improve environmental conditions, etc. Merely replacement of existing machinery / equipment will not qualify for any concession under the scheme and SIDBI is the Nodal Agency.
Existing units with or without expansion and new units are eligible for coverage under the scheme. Existing units can modernise and/or expand with the state-of-the-art technology. New units must set up their entire facilities only with the appropriate eligible technology.
Under this scheme interest reimbursement of five percentage points on the interest charged by Bank for rupee loans given for a project of technology upgradation or cover for exchange rate fluctuations not exceeding 5% in respect of foreign currency loans is available.