Tamil Nadu Chief Minister MK Stalin, Union Commerce Minister Piyush Goyal and Union Minister of State for Textiles Darshana Vikram Zardosh at the exchange of MoUs for the first PM Mitra Park on March 22, 2023. , Photo credit: The Hindu
the story So Far: On March 17 the The government announced that seven mega textile parks Under ₹4,445-crore PM Mega Integrated Textile Region & Apparel (PM Mitra) scheme will be set up in the first phase. The notification for large scale textile parks under PM Mitra was given in October 2021. The plan to streamline the textile value chain into an ecosystem, from spinning, weaving and dyeing to printing and garment manufacturing, is expected to generate investment. Value ₹ 70,000 crores. According to Commerce and Industry and Textiles Minister Piyush Goyal, this will also lead to the creation of 20 lakh jobs.
What to expect in the first phase?
Under the first phase of the PM Mitra scheme, large textile parks, spread over at least 1,000 acres, will come up in seven states – Tamil Nadu, Karnataka, Telangana, Madhya Pradesh, Maharashtra, Gujarat and Uttar Pradesh – housing the entire textile value chain, fiber From clothes to clothes. The parks will have plug-and-play manufacturing facilities and all common facilities required.
The budget outlay of the central government for the scheme, which is Rs 4,445 crore, is to be spent by 2027-28. Special purpose vehicles will be created for each park with 51% equity shareholding by the state government and 49% by the Centre. State governments will provide the land, become part of the SPV and give necessary approvals. The central government will disburse a development capital fund of ₹500 crore in two installments for each of the seven facilities. This is for building the core and support infrastructure. It will also give competitive incentive support of ₹300 crore per park to be provided to manufacturing units.
Is it different from previous fabric schemes?
The textile and apparel sector has benefited from various programmes, such as the Apparel Park Scheme announced in 2002 and the Integrated Textile Park Scheme launched in 2005, which supported the development of common infrastructure. PM MITRA Yojana is envisaged as a unique initiative and the emphasis is on large scale production and provision of plug-and-play manufacturing hubs. The scheme is to be implemented jointly by the Central and State Governments. The parks, which will be open to foreign direct investment, will be located in states that have inherent strengths in the textile sector. Each park will also have wastewater treatment plants, housing for workers, skill training centers and warehouses. It is designed to attract investments from companies that are looking to scale up, and require integrated manufacturing facilities at one location.
What will be the effect on MSMEs?
The micro, small and medium enterprises (MSME) sector is said to control around 80% of the textiles and garments made in India at present. Also, Indian textile and clothing units are more cotton based. The industry has mixed views on the immediate impact of the huge investment coming to the parks on existing units.
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However, with increasing challenges such as the global geopolitical situation, and foreign buyers exploring China as well as other sourcing options, the last two years have seen remarkable changes in supply chains. Orders are transitioning to suppliers that are highly price competitive and have sustainable production processes. Even those who fulfill low volume orders are also doing value addition for better price realisation. Thus, manufacturers with vertically integrated facilities are at an advantage as compared to smaller, standalone players. MSME exporters are also realizing that there is a need for integrated, larger facilities and these factors are expected to drive the investment plans of the industry.
Does the industry expect an increase in exports?
Indian textile and clothing exports have remained stable at around the $40 billion mark over the past four years, and stood at $44 billion last year; It aims to achieve $100 billion in exports and targets a domestic business of $250 billion by 2030. PM MITRA Park aims to enhance the export potential of the region. Cotton-based products make up about 65% of total textile and apparel exports. Indian exports, which include a range of products, are mainly known for yarn, bedsheets and towels, T-shirts and denim fabric. The expansion of fiber and product line will give India a larger share of the global market than the current 5%. To make a big leap in exports and domestic sales, the industry must be price competitive right from the raw material stage and ready to meet the demands of international buyers with stability and traceability. State governments and developers should emphasize on PM Mitra Parks for sustainable and cost-effective solutions to pollution control and other issues that value-added segments of the textile chain face. India can learn from countries like Turkey where integrated textile parks are highly efficient. Some MSME players who have the appetite to invest but need resources are hoping that the government will link the Production Linked Incentive Scheme II with PM MITRA, although the guidelines issued in January last year say that the PM The incentives under MITRA will be available only to those companies which have not availed the PLI scheme. Insiders say that the central and state governments will have to encourage MSME units to invest in and scale up PM Mitra parks. Otherwise, India faces the risk of missing out on the opportunity to become a major destination for textile production and exports.
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On March 17 the The government announced that seven mega textile parks Under ₹4,445-crore PM Mega Integrated Textile Region & Apparel (PM Mitra) scheme will be set up in the first phase.
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Under the first phase of the scheme, large textile parks, spread over at least 1,000 acres, will be set up in seven states – Tamil Nadu, Karnataka, Telangana, Madhya Pradesh, Maharashtra, Gujarat and Uttar Pradesh, covering the entire textile value chain. , from fiber to fabric to apparel.
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The PM MITRA park aims to enhance the export potential of the sector as Indian textile and clothing exports have stagnated at around the $40 billion mark in the last four years, and last year it stood at $44 billion.