Industry And Cluster | News & Insights

Global Textile Champs in the Works.

Published: February 26, 2020
Author: TEXTILE VALUE CHAIN

Plan to handhold top cos to meet demand; fiscal benefits, infra support by states.

India will soon firm up a plan to handhold top textile companies to help them achieve sufficient size and scale to cater to worldwide demand. The aim is to create a few global champions to boost exports through fiscal benefits and adequate infrastructure support by the states.

A senior government official told that a policy is being finalised to address the lacunae under existing textile schemes and come up with parameters that will help identify states through the challenge method to set up textile parks with all forward and backward linkages available in the same place to make India cost competitive.

“A proposal will be submitted to chief secretaries of all states for consideration as the Centre plans to rope in states,” the official said.

The government plans to set up 1,000-acre mega textile parks as it revamps the Scheme for Integrated Textile Park as part of the New Textile Policy. Top policy measures that are being considered include significantly raising the cap on investment under the existing scheme that will prompt companies to set up mega manufacturing units in one place and undertake technology upgradation. Currently, different subsidies are capped at lower investment levels, prompting companies to remain small and scattered.

“Besides, the Centre will soon float a challenge method for states to come on board for setting up such mega textile units by providing land, electricity and water at reasonable cost,” said the official. Preference will be given to coastal states and states with abundant water availability for such mega units in the long run.

The Niti Aayog recently held a meeting with top officials of all stakeholder ministries and industry executives to understand issues restricting growth of the sector and measures needed to give an immediate push to firms to scale up. It’s estimated that Indian textiles are 14% more expensive than those made by units in China, Bangladesh and Vietnam due to high logistics costs. The plan, if successful, could be replicated in other sectors such as IT and fisheries as the government strives to push Indian exports, which have been stagnant at $350 billion over the past several years.

The benefits could be restricted to apparel, fabric, made-ups and technical textiles, including manmade fibre, because of the substantial value addition in these sectors.

Another official confirmed that the focus is on manmade fibre (MMF), technical textiles and garments as the government is looking for a few champion companies.

As per an industry representative, the plan is twofold–to promote champions in existing textile sub-sectors and identify new ones in new product lines. The champion companies or star trading houses get certain benefits such as self-declaration during customs clearance and exemption from furnishing bank guarantees for availing of export promotion schemes.

“Globally, the growth is in manmade fibre. In India, the share of cotton textiles is 60% and the rest is synthetic while the trend is the opposite elsewhere,” said a Delhi based exporter of textiles.

Commerce and industry minister Piyush Goyal recently said the government is focusing attention on manmade fibre as the world has moved to this.

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