The US$ 100 bn textile & apparel industry of India is projected to grow at a CAGR of 18% to attain a size of U$190 bn by 2025. Attainment of such an ambitious target would require India to hone its capabilities and improves its infrastructural facilities. The textile & apparel is a time sensitive industry, which requires extensive rigour in a country’s logistics capabilities so that minimal time is consumed/wasted in either the delivery of the raw materials, processing or the dispatch of the finished products from one site to another. A very crucial element of supply chain across the world is logistics and the amount of time wasted as well as cost incurred in the transportation is huge. Imagine, what all could change if we could fit all the pieces of the supply chain at one place! PM Mitra aims to do exactly that.
Why is the government incentivising the construction of Mega Integrated Textile Parks?
PM MITRA is government’s initiative that will help strengthen India’s infrastructural as well as logistical capabilities so that we can brace ourselves for the upcoming growth. With multiple manufacturing units coming up across the value chain, we can only prepare ourselves to be on time by making a shift in our infrastructural capabilities. PM Mega Integrated Textile Regions and Apparel Parks (MITRAs) Scheme, launched by the Ministry of Textiles (MoT) is one such step in the right direction. This scheme will develop integrated large scale and modern industrial infrastructure facilities for total value-chain of the textile industry like spinning, weaving, processing, garmenting, textile manufacturing, processing & printing machinery industry. MoT has allocated a budget of Rs. 4,4445 Crores in order to strengthen the Indian Textile Industry by way of enabling scale of operations, reduction of logistics cost by housing entire value chain at one location and attracting investment, generating employment, and augmenting export potential. This allocation will take place across the period of over 7 years.
How will the construction of these parks go about?
This scheme will leverage the Public Private Partnership model for the fast-paced implementation in a time-bound manner. This will go hand in hand with the purpose of this scheme to achieve the United Nations’ Sustainable Development Goal 9, which is to “Build resilient infrastructure, promote sustainable industrialization and foster innovation.” These parks are envisaged to be located at sites which have inherent strengths for the textile Industry to flourish and necessary linkages to succeed. A minimum of 1000 acres of contiguous and encumbrance-free land is required from the state governments for the same and 7 PM MITRA parks will be set up in a partnership with these willing state governments for the Greenfield and Brownfield Parks. Out of the total land available to the state government, 50% will be used for manufacturing; 20% area for common utilities and infrastructure like roads, CETP, STP, WTP etc.; 5% area each for specialized activities (like Testing labs, Training Centres, R&D Centres etc) and logistics zone; 10% area for subsidised housing and associated social infra and the remaining 10% of the area can be used for commercial use which can span across hotels, exhibition, convention centres, offices etc.
How will the funding take place under the PM MITRA Scheme?
The PM Mitra Scheme will see the project funding under Development Capital Support (DCS) which will aid in the creation of the core infrastructure, e.g. internal roads, power distribution infrastructure, water and waste water treatment plant, development of plug and play infrastructure as well as creating support infrastructure like Common Effluent Treatment Plant (CETP), Worker’s Hostel, Health facility, etc. The Greenfield Parks will get a maximum support of Rs. 500 Crores while the Brownfield Parks will get a maximum support of Rs. 200 Crore per park. In order to incentivise the early setting up such parks, Competitive Incentive Support (CIS) is available which is a provision of Rs. 300 per park and will be available strictly on a first come first serve basis. Incentives up to 3% of the total sales turnover of the unit with a maximum cap on one company will be provided in order to reduce its cost and offset its disadvantages to a certain extent. The CIS incentive will only be available to the manufacturing units who are not availing the benefits of the Production Linked Incentive (PLI) scheme of the government.
Who and How?
Currently the Ministry of Textiles has received 18 Preliminary Project Reports (PPRs) from 13 State Governments. The state governments of Karnataka, Madhya Pradesh and Maharashtra have applied for more than one location. These PPRs are currently under scrutiny and will be evaluated on various parameter having pre-defined weightages and spanning across Site Connectivity, Existing Textile Ecosystem, Availability of Utility Services at Site, State Industrial or Textile Policy for setting up textile units, and Environmental & Social Impact of the site.
Though the results for the selection of sites offered by the State Governments are awaited, it is important that we realize the impact the development of such Integrated Parks can have on an area in terms of its development, modernization as well as employment generating opportunities. The 7 location that will be selected will undoubtedly benefit from the construction of PM MITRA Parks and help the textile industry of the country as a whole to flourish and reach the growth potential we know it has!