The Government of India is coming under pressure to provide with incentive schemes to sustain and develop the textile industry which
contributes to nearly one third of foreign exchange income through exports. In
addition, textile industry provides the second highest employment next to
agriculture. Therefore, both from economic and political points of view,
Government has to support the growth of the textile industry by tapping into
untapped segments such as nonwoven and technical textiles.
Furthermore, according to the Planning Commission of India,
the 11th five year plan should enable an all inclusive growth,
meaning growth not only in the high skilled IT sector. In order to rise the
income levels of unskilled and under represented people, growth should occur in
agriculture and manufacturing sectors. Textile industry occupies an important
position within the manufacturing sector in India and hence receives the
attention of the upper echelons of Indian administration. This situation has
heightened due to the current decline in the export of commodity textiles due
to the hike in rupee against dollar. Indian conventional textile industrys
comparative advantages such as low cost skilled labour and dollar rupee ratio
have started eroding in the last year. For example, rupee became strong by 12%
against dollar within one year resulting in dramatic decrease in the influx of
foreign exchange via exports. In addition, the labor advantage that India has, is becoming competitive with challenges from countries such as Vietnam, Cambodia and Bangladesh that are capable of providing high skilled low cost labor in the commodity
textile sectors. Hence, the preferred option for the textile industry is to
enlarge its competency in related textile fields such as nonwoven and technical
textiles. The nonwoven and technical textile industry provides a safe haven, in
that it can cater to both the burgeoning domestic and export markets.
Government Schemes
The Government of India during its 11th five year
plan i.e., April 2007 March 2012 has initiated and has continued with several
positive schemes to support the growth of nonwoven and technical textile industry.
The National Mission for Technical Textiles was launched by the Honorable Prime
Minister of India, Dr. Manmohan Singh, in the Texsummit-2007 conference on
September 1, 2007 in New Delhi. This ambitious mission has a budget of US$ 170
million for the next five year period. The main aim of the mission is to grow
the current technical textile industry to a size of around 12-15 billion
dollars by 2012.
The mission will be divided into four mini-missions, which
will focus on creating awareness, human resource development, capacity building
of the nonwoven and technical textile industry base and the related machinery
industry base, establishing centers for research excellence and support with
testing and standardization. This mission spans the entire spectrum of the
technical textile industry and focuses on those areas that will aid the growth
of the industry. The Government has identified four important sectors within
the technical textile industry for immediate attention and growth. These are:
1.
MEDTECH;
2.
GEOTECH;
3.
AGROTECH and
4.
PROTECH.
As is evident from these prioritized sectors, durable and
semi-durable technologies will take the front seat and disposable technologies
will follow.
The Technology Upgradation Fund scheme which was launched in
1999 to provide a shot in the arm for the under developed sectors of the
textile chain will be continued during the 11th five year plan. This
scheme provides 10% capital subsidy upfront for new projects involving new
machinery in technical textiles with the addition of 5% interest subsidy on the
loans. Technical textile sector was not included in the earlier five year plan
period and it is glad to report that investors in the technical textile sector
will be able to avail this subsidy. Almost all technical textile machinery such
as coating and laminating, spunmelt machinery, carded and thermal bonding
machines and converting machines are covered under this scheme. The basic
custom duty on imported technical textile machinery has been reduced from 10%
to 5%, so that the effective customs rate comes around 20%.
The Government has created Special Economic Zones (SEZs)
with the aim of enhancing Foreign Direct Investments and exports from India. There are fourteen Special Economic Zones in India that have been approved which have focus on textile related activities. Examples include:
1.
MUNDRA SEZ in
the western state of Gujarat,
2.
MAS HOLDINGS SEZ
in South India, etc.
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