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Tuesday, October 19, 2021

Global push: Cabinet gives go ahead to Rs 4,445-crore scheme for textiles

The MITRA parks, which aim to integrate the entire textile value chain from spinning, weaving, processing/dyeing, printing to garment manufacturing at one location, were first announced in the FY22 Budget.

By: ENS Economic Bureau | New Delhi |
Updated: October 7, 2021 4:02:59 am
New Delhi: Union Ministers Piyush Goyal and Anurag Thakur arrive to address the media on Cabinet decisions, at National Media Centre in New Delhi, Wednesday, Sept. 29, 2021. (PTI Photo)

Aiming to make the textiles sector more internationally competitive, the Cabinet on Wednesday approved a Rs 4,445-crore scheme to set up seven Mega Integrated Textile Region and Apparel (MITRA) parks.

The MITRA parks, which aim to integrate the entire textile value chain from spinning, weaving, processing/dyeing, printing to garment manufacturing at one location, were first announced in the FY22 Budget. States will compete to be selected under the scheme, which is aimed at reducing logistics cost and strengthening the value chain of the textile sector to make it globally competitive.

“Today the value chain is spread across the country. Cotton is made in Maharashtra and Gujarat. It is then processed in Tamil Nadu before it is shipped to Bengaluru or Noida after which it is sent to the port,” said Textiles Minister Piyush Goyal, adding that moving products so many times had, in the past, made logistics cost “unviable.” High logistics costs are considered a key hurdle to India’s goal of boosting textile exports. Private institutions have estimated logistics costs to be 13-14 per cent of GDP and the government is aiming to bring this down to 10 per cent.

“There will be competition in a very transparent manner through a challenge route based on which state gives more facilities, provides cheap land, makes cheap water and power available… and has a labour situation which is in control and does not create too many problems,” Goyal said.

Tamil Nadu, Punjab, Odisha, Andhra Pradesh, Gujarat, Rajasthan, Assam, Karnataka, Madhya Pradesh & Telangana have already shown interest in participating in the scheme, according to a government release.

Under the scheme, the centre will provide development capital support for the development of common infrastructure of Rs 500 crore for each greenfield MITRA park and upto Rs 200 crore for each brownfield park. An additional Rs 300 crore will be provided as Competitiveness Incentive Support for the early establishment of textiles manufacturing units in each of these parks. Each MITRA park is expected to directly generate 1 lakh jobs and indirectly generate a further 2 lakh jobs.

Goyal said the investors who set up “anchor plants” that employ at least 100 people will be eligible for incentives of upto Rs 10 crore every year for upto three years noting that the incentive would be given on a first come, first served basis. Each MITRA Park will have an incubation centre, common processing house and a common effluent treatment plant and other textile related facilities such as design centres and testing centres according to a government release.

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