To counter Bangladesh & Vietnam, Budget announces setting up Mega Investment Textiles Parks

To enable the textile industry to gain a global edge, Finance Minister Nirmala Sitharaman announced a scheme of Mega Investment Textiles Parks (MITRA) in the Budget on Monday. The scheme is expected to help the industry become globally competitive, attract large investments and boost employment generation. “A scheme of MITRA will be launched in addition to the PLI scheme. This will create world class infrastructure with plug and play facilities to create global champions in exports. 7 Textile Parks will be established over 3 years,” the minister stated.

Such parks have already been present in nations like China and Vietnam which help give a thrust to the textile sector. India has been losing its competitive edge to Bangladesh and Vietnam owing to their low labour costs, wider scale of operations and the Free Trade Agreement (FTA) advantage enjoyed by them. With the textile sector being the second largest employment generator in the country after agriculture, the Budget announcements mean a significant step forward for the industry. This comes after a tumultuous year for the textile and clothing industry in 2020 which saw a spate of job losses, cancelled orders and an acute crunch of financial resources.
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“It is an important announcement in ‘Aatmanirbhar Bharat’ and revival of India in Covid. It will improve creation of solid infrastructure for people and industry. As a textile industry, we are losing our grip in India to countries like Bangladesh and Vietnam. Such steps will incentivise the garment manufacturing and textile industry. If fructified within the said timeline of next 3 years, it will herald a new beginning for the textile sector,” K R Sekar, Partner, Deloitte India states.

Sekar, however, adds that more perks in terms of GST reduction and tax holiday benefits to manufacturing set ups in textile parks can free up more working capital and also act as good incentives.

Lauding the move, Textiles Minister Smriti Irani tweeted that the announcement on MITRA will be a game changer for the Indian Textiles Industry. “Along with the Production Linked Incentive (PLI) scheme, MITRA will lead to increased investments and enhanced employment opportunities. Emphasis on state-of-the-art infrastructure through MITRA will give our domestic manufacturers a level-playing field in the international textiles market and pave the way for India to become a global champion of textiles exports across all segments,” she said in her tweets.

Exports in the textiles and apparel industry are expected to reach $300 billion by 2024-25 resulting in a tripling of Indian market share from 5% to 15%, as per national investment promotion and facilitation agency Invest India. The industry size is expected to double to $300 bn by 2025-26, for which the 7 mega textile parks have been planned.

Apparel Export Promotion Council (AEPC) Chairman A Sakthivel says that the measures will promote production and export of manmade fibre (MMF) based garments. “The Rs 10,683 crore PLI scheme for MMF garments and technical textiles, along with the new Mega Investment Textile Parks scheme for setting up seven textile parks in India over three years will bring in huge investment in the MMF sector,” he highlighted.

To counter Bangladesh & Vietnam, Budget announces setting up Mega Investment Textiles Parks To counter Bangladesh & Vietnam, Budget announces setting up Mega Investment Textiles Parks Reviewed by TechCO on 2/02/2021 Rating: 5

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