Textile manufacturing units in the Tirupur knitwear cluster will be classified under new criteria as micro, small or medium enterprises based on the annual turnover. Units with an annual turnover less than Rs 5 crores would be termed micro enterprises. Units with an annual turnover of more than Rs 5 crores and less than Rs 75 crores would be put under the small enterprises category. Units with a turnover between Rs 75 crores and Rs 250 crores would be classified as medium enterprises.
This is a significant step which will enable almost 98 per cent of the textile manufacturing units in Tirupur to get classified under micro, small and medium enterprises. They can avail government benefits extended for such units following the changes made in classification criteria of industrial units. The new classification will trigger growth and encourage the ease of doing business.
The earlier criterion was based on investments made on plant and machinery. It prevented units having more than Rs 10 crores capital investment on plant and machinery from being classified as micro, small and medium enterprises. Tirupur is the knitwear capital of India. This is the right time for the knitwear sector to capture the market that’s leaving China, due to an increase in the cost of manufacturing.