States make a beeline as Kitex Garments drops Rs 3,500-crore Kerala plan

Kitex Garments has said Tamil Nadu, Karnataka, Telangana, Andhra Pradesh, Gujarat, Uttar Pradesh, Madhya Pradesh, and Odisha have approached them for a Rs 3,500-crore project that it had planned in Kerala.

The company said it has also received an offer from the Bangladesh government to shift the project there. Both Tamil Nadu and Karnataka governments have already made open offers to Kitex.

“Business development in Kerala is a big zero, with no help and no incentives. In addition, investors face a lot of harassment. Political and bureaucratic issues are the major reasons behind my decision to shift the project out of Kerala,” Kitex Garments Managing Director Sabu M Jacob said. A major trigger behind the move were the 11 raids and inspections conducted by various government departments within a month.

On June 29, Jacob announced that it would withdraw the project for building apparel and industrial parks in Kerala, due to “harassment by the state government departments”. 

The project was supposed to be completed in five years and was expected to generate employment for at least 35,000 people. Kitex — the third-largest infant garment brand in the world — is one of the biggest suppliers in the US, with its clients including major brands such as Walmart and Target. The company has exports to the tune of Rs 1,500 crore per annum, while its sales in the domestic market are only about Rs 150 crore.

There were claims by the government that the company was flouting environmental rules and not providing minimum wages. “We are following international guidelines for even our waste treatment... There were 73 charges levelled against me, all of which are legally invalid,” Jacob said.  

“Look at Tamil Nadu. They are providing 40 per cent capital investment subsidy, land at 50 per cent cost, 100 per cent exemption on state GST, in addition to 20 per cent salary reimbursement by the government for 10 years. On the other hand, we are only being harassed in Kerala,” Jacob added.  

Responding to the company’s claims, Kerala Industries Minister P Rajeev said the state had no role in the series of inspections “as it was carried out following complaints filed at the National Human Rights Commission and a directive from the High Court on the basis of a WhatsApp message allegedly sent by a Kitex employee”. 

Chief Minister Pinarayi Vijayan, too, had responded saying Kerala was one of the most investor-friendly states in the country.

Kitex came into the limelight for launching a political party called Twenty20 Kizhakkambalam, as part of its corporate social responsibility. It is now in power in the Kizhakkambalam, Kunnathunad, Mazhuvannoor, and Aikkaranadu gram panchayats.