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Central Asian countries woo Indian textile cos
Faced with labour law inflexibilities and constraints such as high power tariffs and infrastructure bottlenecks, Indian textile players are looking to shift production base.
The Uzbek Government is offering a 15 per cent concession on cotton procurement for spinning purposes and 20 per cent on the same for integrated apparel production facilities.
The Kazakhstan Government is promoting investments into the `Ontustik SEZ', where textile firms would be exempt from corporate income tax, land and property taxes, and also from VAT up to 10 years.
The only basic requirement for investors would be that the textile products should be made from 100 per cent cotton, of which not less than 30 per cent must be Kazakh cotton.
Spentex Industries Ltd had, in July 2006, acquired the business of Tashkent-To'yetpa Tekstil Ltd, a state-owned spinning company in Uzbekistan for $81 million, for which the Uzbek administration extended a number of incentives, including a 15 per cent discount on raw cotton, exemption on corporate taxes, customs duty and VAT. Spentex, subsequently in November, acquired the assets of a company in the country to set up a dyeing facility there.
The Vardhaman group is also reported to be planning to acquire a textile firm in Uzbekistan to expand its operations in the sector, according to industry sources.
