Textile Sector and PM Mitra Scheme

Textile Sector and PM Mitra Scheme
 

News: The Centre has selected sites in Tamil Nadu, Telangana, Karnataka, Maharashtra, Gujarat, Madhya Pradesh and Uttar Pradesh to set up new textile parks under the PM Mega Integrated Textile Regions and Apparel (PM MITRA) scheme.
 

About PM Mitra Scheme:

o PM MITRA Park will be developed by a Special Purpose Vehicle which will be owned by the Central and State Government and in a Public Private Partnership (PPP) Mode.

o The scheme seeks to develop textile parks with integrated value chain from spinning, weaving, processing, dying and printing to garment manufacturing.

o 5F – Farm to Fibre to Factory to Fasion to Foreign

Significance of Textile Sector

o Contributes to 2% in GDP
o Share in exports - More than 10%
o Generates direct employment for 45 million
o Global market share 4%
o Labour intensive, more women participation
o Opportunities for unskilled laborers

How will the scheme be implemented?

o Total outlay – Rs. 4,445 crores, completion by 2026-27.

o State govt to provide 1000 acres of land, also provide power and water facilities.

o An SPV owned by the Centre and State Government will be set up for each park which will oversee the implementation of the project.

o The Ministry of Textiles will provide financial support in the form of Development Capital Support upto Rs 500 crore per park to the park SPV.

o Competitive Incentive Support (CIS) shall also be provided to incentivise speedy implementation.

o Convergence with other Government of India schemes shall also be facilitated in order to ensure additional incentives to the Master Developer and investor units.

What are the challenges faced by Textile sector?

o Stagnant domestic production – IIP – Textiles is yet to reach pre-Covid level. The textile sector’s gross value addition has seen a contraction for three consecutive quarters.

o Rise in imports - In the period from April to November 2022, imports of textiles were valued at Rs 433 billion, same as last year they were valued at Rs. 313 billion. India allowed duty-free import of readymade garments from Bangladesh under the South Asian Free Trade Agreement (SAFTA) in 2006, resulting in an increase in imports of apparels made with Chinese fabrics and yarns.

o Exports suffer due to Limited market access – For example, LDC’s Bangladesh, Vietnam, African countries get duty free access to other countries which makes Indian exports less competitive.

How will PM-MITRA scheme help?

o It will provide state of the art infrastructure and attract cutting edge technology.
o It will boost FDI and local investment
o The cluster-based approach will reduce the increased wastage and logistical costs of the sector, and thus will improve the competitiveness of the country's textile sector.
o Government estimates suggest that investment of Rs 70,000 crore into these parks can generate employment for about 20 lakh people.
o It will promote economy of scale and efficiency. 

What are other initiatives taken?

o Amended Technology Upgradation Fund Scheme
o SAMARTH Scheme
o Power-Tex India
o Silk Samagra Scheme.
o Jute ICARE.
o National Technical Textile Mission
o Scheme for integrated textiles parks 

Way Forward

o India can make the sector organised by setting up mega apparel parks and common infrastructure for the textile industry. The focus should be on the modernisation of obsolete machinery and technology.

o Increased investments and focused approach will underline the government’s vision for Make in India and Make for World