TUFS has been launched with a view to sustaining as well as improving the competitiveness and overall long term viability of the textile sector. The scheme intends to provide timely and adequate capital at internationally comparable rates of interest in order to upgrade the textile industry's technology level.

For SSIs: The borrowers can avail of any one of the follwoing benefits: 5% interest reimbursement on the interest actuallycharged in respect of rupee loan or coverage of exchange rate fluctuation not exceeding 5% p.a. from the base rate or cost of forward cover premium upto 5% p.a. on the base rate of exchange in respect of foreign currency
OR
12% Credit Linked Capital Subsidy on eligible investment made for modernisation, for Small Scal Textile and Jute Indutries in respect of Rupee Loans; The units are permitted to make new investment eligible under TUGS upto Rs. One crore or till the unit reaches SSI limit, whichever is higher.
OR
20% Credit linked Capital subsidy (CLCS @20%) on machinery cost exclusively for powerloom units in SSI sector. The cost of modern waeving machinery admissible is upto Rs. 60 lakh (i.e. Subsidy ceiling is Rs. 12 lakh).
For units graduationg out of SSI and Medium Sector Enterprises (MSEs): The borrowers can avail 5% interest reimbursement on the interest actually charged in respect of rupee loan or coverage of exchange rate fluctuation not exceeding 5% p.a. from the base rate or cost of forward cover premium upto 5% p.a. on the base rate of exchange in respect of foreign currency loan.

SSI units, SSI units graduationg out of the sector after implementation of the schemeand MSEs in the Textile sector and Cotton Ginning and Pressing sector can be covered.

Not to exceed 2:1 for the company/firm/concern as a whole