New Delhi: The government on Wednesday cleared an incentive scheme for attracting private investments into the labor-intensive textiles sector with a focus on man-made fibre apparel, man-made fibre fabrics, and 10 technical textile products which were made cleared economically on an interview with Vijoy Kumar Singh, additional secretary in the ministry of textiles.
Vijoy Kumar Singh says, the Rs. 19,000 crores private investment may yield more than Rs. 3 trillion turnovers. There is a 12% goods and services tax (GST) on sales, which more than recovers the government spending on the scheme. It also will generate 750,000 jobs. That is a win-win situation. The company has to invest, produce, and meet the benchmark and will be paid off fairly.
The textile sector is quite fragmented and has diverse segments such as cotton, handloom, processing industry, weaving, knitting, and power loom. The ministry of textiles has different expectations from investors hoping this, will attract integrated weaving and processing units. That is a capital-intensive sector. The weakest link is processing, especially man-made fibre. The ₹300 crore investment category targets integrated plants.
Garment making, on the other hand, or a small technical textile unit is a low-Capex, labor-intensive business. Making footballs or fire-resistant cloth requires small investments, not ₹300 crores. Both these sectors are equally important to the Textiles department.
The scheme aims at achieving economies of scale. In such a large base, there are many people keen to grow. The PLI scheme is open to both domestic and foreign investors on an equal footing, and if a large number of applications are received, there will be a selection process. Selection will be based on certain criteria, one of which is the backwardness of the area of the proposed investment. The other criteria include the size of the investment and the jobs to be created.
The textile industry is currently poised for robust growth. We see that cotton exports are picking up. This year, in the last four-five months, it is much higher than even the level seen in 2019-20. The growth is now visible. This is going to continue. Many good things are going to happen and it is the right time to be in this sector, further stated by Vijoy Kumar Singh.