Emerging Opportunities & Policy initiatives for the Growth of Textile

Dr. Chandan Chatterjee Director

The Center for Entrepreneurship Development

& Advisor, iNDEXTb

Ahmedabad

1st March 2013

India – to dominate Textile World

China Slows down

Bangladesh and Pakistan battle with energy shortage, besides dependency on raw material

Young India

China, conversely, is aging faster than any other country in history

By 2020, US will be short of 17 million people of working age, China by 10 million, Japan by 9 million and Russia by 6 million. India will have a surplus of 47 million working people

Over 35% of our population is below the age of 20 by 2020. India will get 350 million as working age…largest in the world

Impact of National Textile Policy

Indian Textile- 1960 and beyond……

1960- Ban on expansion of Weaving capacity

Mushrooming decentralized Power loom with

discarded loom( replacement policy in force)-

permit till 1980

Modernization of Cotton Spinning

1980-Soft loan of Modernisation..Benificiary-

Spinning

National Textile Policy

1985- National Textile Policy-

power loom old and obsolete

technology regularized

Textile 1990 & beyond..

Foreign Collaboration in Processing Machinery

till 1990

1990- liberalized..import of outdated Sulzer tech

1991-Liberisation Policy ..

Spinning EOU..

Discarded M/C makes small spinning at

Coimbatore and Ahmedabad

Impact of TUF and Cotton Technology Mission –1999

Targeting- Weaving/Processing Rs74,000cr since1999

20M spindle in 1990 to 30 M in 2010 and

1.4 M loom to 2.5 M Loom

Spinning after 3 years only due to free Trade Regime

Weaving –only 30,000 new installation

Processing- demand for hi-tech was low till 10 % Credit linked subsidy

announced

Cotton Technology Mission.. Successful for Ginning sector

Policy 2000,,, Garment out of SSI list

Prevailing supports by GoI and impact

TUF Scheme

(*) 5% Interest Reimbursement on plant & machinery without

any ceiling in all Textile Sector; but 4% incase of only Spinning

Additional 10% Capital Subsidy for new shuttleless loom

(Weaving), Processing, Garment and Technical Textile

25% Capital Subsidy for Handloom & Silk Sector

2% Interest Subvention Scheme – Foreign Trade Policy (*) Note

a) Investment in building, Pre-operative expenses and margin money for working capital for

Apparel & Handloom (50% caps) and humidification plant, compressor, RO Plant, Beam

knotting (10% caps)

b) Powerloom in SSI (Rs. 5 cr) – 20% margin money (Max Rs. 60 lakhs for second hand

imported shuttleless loom and independent preparatory units but Rs. 100 lakhs for new

shuttleless loom) – 15% promoters

c) Bench marking of price for imported second hand shuttleless weaving

d) Indigenous Machinery Manufacturers – are benchmarked

e) Interest Reimbursement - for 7 years considering 2 years for implementation/moratorium

period

f) Rs. 178 crore – 11th Plan + Rs. 158.86 crore 5

Impact of Union Budget -2013-14

1

0

TUF Scheme Extended

Import duty on Textile Machineries Slashed

Removal of Excise duty on Garments

1

1

Interest Subsidy

Raw Material/VAT

Manufacturing Facilities

Infrastructure & Technology

Centers for excellence

R & D and Quality Assurance

Skill Development

Achieving Competitiveness

Power Tariff subsidised

Market Development

Policy approach by Gujarat

1

2

Encouraging Environment Friendly &

Energy Efficient Technology

• Support for Energy & Water

Conservation to existing units (more

than 3 years) Assistance up to 50%, Max Rs. 50,000 for Energy

Audit and Water Audit (for processing units)/Envio

Assistance up to 20% of cost of equipments, Max Rs.

20 lakhs

• Support for Environmental

Compliance

Opportunities….To grow with green….

Collaboration

Joint Ventures

Technology Transfers

Nike –Dye Co Water free Technology

TORAY-Silicon Technology

Think Big, Start small, Scale Fast But, with Green Technology

Thank You