Textile mills plan to set up base in western states

Shyam Indofab, a Punjab-based textile mill, is considering setting up a facility in Maharashtra’s cotton-rich Vidarbha region. Managing Director Sanjay Gupta says, “The policy and incentives offered by this western state are attractive.” He adds the mill in Maharashtra would not just have spinning facilities, but knitting and processing units as well.

On the condition of anonymity, another mill owner from Tamil Nadu said he was looking at setting up a mill either in Maharashtra or in Gujarat, as the incentives offered in these states were good. Also, the cost to transport raw cotton would be reduced.

These are not isolated cases. Several textile mills from the northern and southern parts of the country are now looking at expanding their capacity in western states such as Maharashtra and Gujarat. Apart from the availability of cotton and the various incentives offered by these states, severe power shortage in the north and the south is another factor behind mills looking westward. Mills in the South regularly face power cuts. Sometimes, these last for up to 16 hours a day, severely hitting productivity.

WESTWARD HO!

• 12.5% Interest subsidy offered to mills by Maharashtra
   
• 10% Capital subsidy to cotton-growing regions in Maharashtra
   
• 7% Interest subsidy offered by Gujarat to mills keen to set up base in the state
   
• Gujarat is refunding VAT on new units, as well as expansion of existing ones, for textiles and readymade garments
   
• It offers concessions in power rates for new cotton spinning and weaving units

 

Currently, the state governments of Gujarat and Maharashtra are holding roadshows to attract mills in Tamil Nadu. These states are confident mills in the south would shift base over a period of time.

Maharashtra offers 12.5 per cent interest subsidy to mills. It also offers 10 per cent capital subsidy to cotton-growing regions such as Vidarbha, Marathwada and Khandesh. “A lot of mill owners from other states have approached us to expand their capacity in Maharashtra because of the incentives we offer,” state textile minister Naseem Khan told Business Standard.

Gujarat offers seven per cent interest subsidy to mills that want to set up base in the state. It is also refunding value-added tax on new units, as well as expansion of existing ones, for textiles and readymade garments. It offers concessions in power rates for new cotton spinning and weaving units, financial assistance to skill development centres and technology acquisition for the textile industry. The state also supports energy and water conservation.

“There are certain issues that may cause mills to rethink the move, like the language barrier and labour shortage. But we want to see what these states have to offer and would spread the message,” said K Selvaraju, secretary general of the South Indian Mills Association.