India eyes Europe for textiles FDI

The textile ministry aims to increase foreign investment in the sector to meet the government target of attracting foreign direct investment (FDI) worth $6 billion by 2015. A trade delegation led by Textile Minister Dayanidhi Maran is going to Switzerland, Italy and Turkey next week to woo foreign players into the domestic textile industry.

The ministry had earlier commissioned a survey to identify countries with a potential for investment in India. The study carried out by Technopak has identified companies in Germany, Switzerland and France with a potential to invest in garment, apparel and textiles machinery.

The ministry has already completed preliminary talks with 12 foreign companies and the discussions will be taken forward through the trade delegation. The delegates will meet officials of European firms like Beninger, Rieter, Bilsar and Tic AS to seek investment into India.

“We expect to attract 20 per cent of the $6-billion FDI target in the first year (2009-10),” Maran told reporters. India offers various incentives to foreign investors like low-cost labour and intellectual right protection, he added.

Though India allows 100 per cent FDI in the textiles sector, the inflows were a meagre $200 million in 2008, or 0.6 per cent of the total $33 billion FDI.

The Indian domestic textile industry will require an additional investment of $24 billion (Rs 1.1 lakh crore) by 2015 to maintain a growth rate of 8 per cent.

The textiles industry, which is the country’s second largest employer after agriculture, is expected to reach $110 billion (Rs 5,03,380 crore) by 2015, including $45 billion of exports.