The Gujarat government has unveiled its Industrial Policy 2026, introducing a comprehensive package of incentives aimed at attracting investments, strengthening manufacturing capabilities, promoting entrepreneurship and positioning the state as a global centre for innovation-led industrial growth. The policy identifies textiles, technical textiles, footwear and textile waste recycling among its key thrust sectors and sets an ambitious target of attracting Rs. 10 lakh crore (US $105 billion) in investments over the next five years.
A major focus of the policy is the promotion of start-ups. Eligible ventures will receive monthly sustenance allowances, seed funding assistance and additional incentives for women-led enterprises. Start-ups with women co-founders will be eligible for monthly sustenance support of up to Rs. 30,000 (US $317), while seed funding assistance of up to Rs. 30 lakh (US $31,689) will also be available.
The policy provides significant financial support for MSMEs, which have been placed at the centre of the state’s industrial growth strategy. Depending on their location and category, MSMEs will be eligible for incentives covering 35% to 45% of their fixed capital investment through a combination of capital subsidies, interest subsidies and power tariff reimbursements.
Large industries operating in identified thrust sectors will be able to claim incentives ranging from 25 to 35%, while mega and ultra-mega projects may receive support of up to 40%. Certain priority sectors, including footwear manufacturing, will be eligible for incentives of up to 50%.
The policy includes substantial support for wastewater recycling projects, Zero Liquid Discharge (ZLD) systems, cleaner production technologies and common environmental infrastructure. Industries adopting environmentally sustainable manufacturing practices will be eligible for financial assistance under these provisions.
The government has also announced measures to improve industrial infrastructure and workforce welfare. These include support for worker housing, working women’s hostels, private industrial parks, skill development centres and Industry 4.0-ready facilities.
A key feature of the policy is the introduction of ‘Project THRIVE’ (Transition for Harmonized Relocation and Inclusive Vibrant Economy), which seeks to encourage industries operating within congested urban areas to relocate to emerging industrial zones outside city limits. The initiative is designed to ease pressure on urban infrastructure while fostering planned industrial ecosystems around new urban clusters and satellite townships.
Industrial units relocating under Project THRIVE will be treated as new units and will become eligible for a range of incentives, including capital subsidies, wage support of Rs. 5,000 (US $53) per employee per month for six months, assistance for worker housing and infrastructure, and relaxations in floor space index (FSI) norms.
The policy further proposes support for labour housing, workers’ hostels and working women’s hostels near industrial hubs to improve workforce accessibility and reduce commuting challenges.
Bharat Tex Special Report 2026 
