With an aim to create world-class infrastructure with plug-and-play facilities that enable major investments in exports, the Cabinet on October 6 approved seven new mega textile parks.
The parks are a part of the government's 'Farm to Fiber to Factory to Fashion to Foreign' push, and will generate 1 lakh direct & 2 lakh indirect employment per park, Textiles Minister Piyush Goyal said.
The government had first proposed the Mega Investment Textiles Parks (MITRA) scheme back in February, to enable the textile industry to become globally competitive and boost employment generation and exports. These will be set up at greenfield or brownfield sites located in different willing states.
Presently, the entire value chain of textiles is scattered & fragmented in different parts of the country. This includes cotton grown in Gujarat & Maharashtra, spinning in Tamil Nadu; processing in Rajasthan & Gujarat; garmenting in the National Capital Region, Bangalore, Kolkata etc and exports from Mumbai & Kandla.
States such as Tamil Nadu, Punjab, Odisha, Andhra Pradesh, Gujarat, Rajasthan, Assam, Karnataka, Madhya Pradesh & Telangana have expressed interest, Goyal added.
Big plans
The scheme will have two parts, with the larger component being development support. The government estimates the cost of setting up each park at an estimated Rs. 1700 crore. "Of this, upto 30 percent of the project cost or Rs, 500 crore in greenfield parks, and upto Rs. 200 crore in brownfield parks will be provided by the government as development capital support," Goyal said.
On the other hand, the first movers who establish anchor plants and hire atleast 100 people will also also get a competitive incentive support from the government. These businesses can secure upto Rs. 10 crore in a year for three years or a total of Rs. 30 crore under this formula, the Minister stressed. He added this will not be part of the existing PLI scheme.
The government wants 'holistic integrated textile processing regions' to be established around these parks. This would include common services centres, design centres, research and development centres, training facilities, medical and housing facilities as well as Inland Container Terminals and logistics warehouses.
Officials say the scheme was conceived keeping in mind that it will work in tandem with the production-linked incentive scheme(PLI) in the textiles sector. Last month, the government had notified the Rs 10,683-crore PLI, specifically aimed at boosting the production of man-made fibre (MMF) fabric, MMF apparel and technical textiles.
Moneycontrol had reported how the government, pushed by the Textiles Ministry had changed its basic parameters for PIs, till then. While most PLIs targeted high-value goods or those that would cut import dependence, synthetic fibres, which include rayon, nylon, polyester and acrylic, and technical textiles don’t come under either category.
Both schemes together are expected to turn the tide on falling investments and decreasing productivity in the sector.
Lot at stake
In terms of employment, the textiles and apparel industry in India is only behind the overall agricultural sector. It provides direct employment to 45 million people and 60 million people in allied industries, according to Invest India, the government’s investment promotion arm.
India is among the world’s largest producers of textiles products and apparel. The domestic textiles and apparel industry contributes five percent to India’s GDP, seven percent of industry output in value terms, and 12 percent of the country’s export earnings.
The share of India’s textiles and apparel exports in mercantile exports was 11 percent in 2019-20. With the commerce minister now responsible for the sector, the unique trade issues that have eaten away at India’s competitiveness in the global market for textiles are now expected to be given more focus.
Indian companies and exporters have continuously lost market share overseas to more aggressive rivals from China, Bangladesh, and Thailand. This has been excruciatingly large in segments like apparel.
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