The central government is planning to come up with a plan to help attract foreign direct investments (FDIs) into India by early next month.
"The government is working on something. A detailed scheme will soon be announced," a senior government official told Moneycontrol.
The government is working on having a more liberalised FDI regime, in order to tackle the economic fallout of COVID-19 pandemic. "Nothing has been finalized yet. Maybe rules and other process-related hurdles can be eased further so that better investments can flow in," the official said.
As a part of the new scheme, the government is also planning on a land pool which could be used to offer land to interested countries.
"Acquiring land is an issue here, there are a lot of legal hurdles. That's the biggest challenge for companies looking at India as a viable option. The government will try to make that less tedious," the official said.
One of the key focus areas to promote manufacturing would be textiles. "We are in the process of selecting other sectors too. Pharmaceuticals could also be one. But textile would be the key focus, as it needs handholding," the official said.
After agriculture, India's textile sector is considered to be the next biggest employment generator in the country. It employs over 105 million people.
The pandemic came at a time when the sector was battling sluggish growth after demonetisation and the Goods and Services Tax (GST) implementation.
Eleven countries buy 41 percent of India's cotton yarn exports and these countries have reported COVID-19 cases, according to the Cotton Textiles Export Promotion Council (Texprocil).
In value terms, yarn exports are down 30 percent in January-February against a year ago. Cotton yarn exports to China, Iran, Korea and Vietnam have seen a steep decline.
The US and Europe are the two largest markets for Indian textile exporters. Both are imploding with new cases every day. The pandemic has killed more than two lakh people worldwide, with the UK reporting the highest death toll in Europe. The US has reported over 70,000 deaths.
The pandemic has already led to big fashion labels announcing the cancellation of orders and relieving labour. Macy's, the US-based retail giant, has announced that it would grant leave to most of its 1,30,000 employees. British luxury giant Burberry has predicted a steep drop in sales of about 70-80 percent.
The UK-based retailer Primark has cancelled all new orders and Inditex (the owner of popular brand Zara) has written off some $336 million worth of inventory.
"There is a lot of untapped opportunity in the textile sector. World over, the sector has been hit hard. There can be a case of taking advantage of this downturn and making it work in our favour," the official said.
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