Home / Knowledge / News / Textiles / Underdeveloped infrastructure affects FDI in textiles
Underdeveloped infrastructure affects FDI in textiles
07
Oct '16
Underdeveloped infrastructure, restrictive environment and a lack of trade agreement with key markets have been identified as the main reasons for the unsatisfactory foreign direct investment (FDI) inflow in the Indian textile sector, says a recent study. Stringent labour laws were also cited as one of the major challenges that hamper the FDI inflow.

In order to attract large scale investments, acquire global scale and bring India at par with other competing countries, there is an immediate need to review the labour laws to make them investor and labour friendly, says the study that was commissioned by the Indian ministry of textiles.

Labour laws restricting women from working in night shifts and the Industrial Dispute Act, 1947 that stipulates that companies employing over 100 people must obtain necessary approvals for lay-offs need to be amended to rectify the situation.

“Despite India offering a large domestic market, competitive labour costs and a well working democracy, its performance in attracting FDI flows has been far from satisfactory. The country's weakness lies in underdeveloped infrastructure and restrictive operative environment and lack of trade agreement with key markets,” notes the study.

Apparel and textile exporting nations like Bangladesh, Vietnam, Turkey, Cambodia and Pakistan have duty advantage ranging from 10 per cent to 30 per cent for different products in the US and EU markets. This advantage enables them to achieve exports growth rates higher than that of India, according to media reports.

The report points out that the cumulative FDI in Indian textile sector from 2000-01 to 2014-15 is approximately $1.5 billion.

By region, Africa is the largest investor in Indian textile sector, with nearly one-third of the total FDI inflows in India since 2000-01. Out of the investment of $462 million from Africa, Mauritius accounts for about 99 per cent of investment.

Europe ranked second in FDI inflows in India accounting for 25 per cent of total investments. The top 3 investing countries of Europe are Belgium (27 per cent), Finland (13 per cent) and Switzerland (11 per cent). Asia and America are the third and fourth largest investors in the Indian textile industry by region, respectively.

The FDI policy in India allows 100 per cent FDI in the textile sector under the automatic route. (KD)

 

Fibre2Fashion News Desk – India


Must ReadView All

Plan under way to revive Egypt's state-run textile firms

Textiles | On 20th Oct 2018

Plan under way to revive Egypt's state-run textile firms

Egyptian minister for the public enterprise sector Hisham Tawfiq...

Myanmar asks garment units to set up skill testing centres

Apparel/Garments | On 20th Oct 2018

Myanmar asks garment units to set up skill testing centres

Myanmar’s ministry of labour, immigration and population has asked...

Results of Cameroon transgenic cotton trials by 2018 end

Textiles | On 20th Oct 2018

Results of Cameroon transgenic cotton trials by 2018 end

Cameroon’s national cotton development company Sodecoton will...

Interviews View All

Neel Sawhney, One Friday

Neel Sawhney
One Friday

‘The share of kidswear segment in the online sector is still small in...

Headhonchos, Indian textile value chain

Headhonchos
Indian textile value chain

'One nation, one tax' is a great concept

Ghanshyam Ghoghari, Kimora Fashion

Ghanshyam Ghoghari
Kimora Fashion

Bridalwear is not about reds and whites anymore

Manoj Sorathiya,

Manoj Sorathiya

Surat-based Sunrise Imports & Exports Co is a manufacturer and...

Vikas Banduke,

Vikas Banduke

Softech Controls Private Limited (SCPL) is a part of the Cotmac Group, an...

Abhishek Pachauri,

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Johan Berlin, InvestKonsult Sweden AB

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Dr. Rene Wollert, Freudenberg Nonwovens

Dr. Rene Wollert
Freudenberg Nonwovens

Dr. Rene Wollert discusses the current scenario of the global nonwovens...

Mary-Cathryn Kolb, Brrr°

Mary-Cathryn Kolb
Brrr°

Atlanta-based private start-up Brrr° was founded in 2014 to develop...

Sanjukta Dutta, Sanjukta's Studio

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Cigdem Akin, Cigdem Akin

Cigdem Akin
Cigdem Akin

She has carved a niche for herself as the national brand of Turkey. Her...

Bani Batra,

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


October 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search