Cabinet nod for seven new textile parks with Rs 4,445 crore outlay

The parks will be set up at greenfield or brownfield sites. States with contiguous and encumbrance-free land parcels of over 1,000 acres, along with other textiles ecosystems can apply

The Union Cabinet headed by Prime Minister Narendra Modi on Wednesday approved the setting up of seven mega integrated textile regions and apparel parks or PM MITRA with an aim to create more jobs, attract investment and make domestic industry competitive.

The estimated expenditure will be Rs 4,445 crore over a period of five years.

The seven textile parks will be set up at greenfield or brownfield sites located in states willing to accommodate them. State governments with readily available contiguous and encumbrance-free land parcels of more than 1,000 acres, along with other textiles related facilities, will be eligible to apply.

“This will create direct employment for seven lakh people and indirect employment for 14 lakh people. For this, 10 states have shown their interest, seven parks will be set up in the states where there will be more facilities, cheap electricity, cheap land etc,” textile minister Piyush Goyal said in a media briefing after the Cabinet meeting.

States such as Tamil Nadu, Punjab Odisha, Assam, Gujarat, among others, have shown interest, the minister said.

The government has over the last few months announced a slew of short and long term measures such as clearing rebate of state and central taxes and levies (RoSCTL) dues, rolling out production-linked incentive scheme, among others, to boost the growth of the textile sector, which is also considered the second largest employment provider, after agriculture.

Besides India is holding negotiations with the UAE and Australia to provide market access in the textile market and reduce import duties, by entering into free trade pacts.

Currently, the entire value chain of textiles is scattered and fragmented in different parts of the country. For instance, cotton grown in Gujarat and Maharashtra, spinning is done in Tamil Nadu, processing in Rajasthan and Gujarat and garmenting in the national capital region, Bangalore, Kolkata. Exports take place mostly from Mumbai  and Kandla. There were logistics-related challenges and it was not possible to access the entire value chain at one place.

“MITRA offers an opportunity to create an integrated textiles value chain from spinning, weaving, processing/dyeing, printing to garment manufacturing at one location. The integrated textile value chain at one location will reduce logistics cost of industry,” Goyal explained.

For a greenfield park, there will be government backed development capital support at 30 per cent of the project cost, with a cap of Rs 500 crore. For brownfield sites, after assessment, development capital support at 30 per cent of project cost of balance infrastructure and other support facilities will have to be developed and restricted to a limit of Rs 200 crore. “This is in the form of viability gap funding to make the project attractive for participation of the private sector,” an official statement said.

The MITRA parks will have the core infrastructure such as incubation centre and  plug and play facility, developed factory sites, roads, power, water, among others. Support infrastructure such as workers’ hostels, housing, logistics park,  warehousing, medical, training and skill development facilities will also be there.

The Centre will also provide a fund of Rs 300 crore for each PM MITRA park to incentivize manufacturing units to get established. “This will be known as Competitiveness Incentive Support (CIS) and will be paid upto 3 per cent of turnover of a newly established unit in PM MITRA Park. Such support is crucial for a new project under establishment which has not been able to break even and needs support till it is able to scale up production and be able to establish its viability,” the statement said.