Make in India 'Textile & Apparel' Sector'- Achievement Report



Make in India 'Textile & Apparel' Sector'- Achievement Report

Textiles & Apparel
The Indian textile industry exhibits rich cultural
heritage of India with wide variety of fabrics,
techniques and hues that reflect the diverse set
of people and traditions across the country.
One of the oldest industries in India, it covers
an extensive spectrum of segments, from hand
woven/hand-spun, unorganized segment on
one end to capital and technology intensive
organized segment on the other. India is the
largest producer of Jute in the world and is the
second largest producer of silk and cotton
globally.

This sector offers tremendous employment
opportunities for people, especially in the rural
regions. The textile sector in India accounts for
10% of the country’s manufacturing production,
5% of India’s GDP, and 13% of India’s exports
earnings. Textile and apparel sector is the
second largest employment provider in the
country employing nearly 51 million people
directly and 68 million people indirectly in
2015-16.
Efforts are being made to restore glory of
cottage based traditional sectors like
handlooms, handicrafts, jute and wool through
an integrated approach covering entire value
chain.
To provide encouragement to textile
manufactures and farmers of raw materials, the
government has been providing incentives like
minimum support price to cotton farmers,
upgrading the technology for handloom
weavers and providing centres for trade
facilitation. The emphasis on the handloom
brand, such as through the National Handloom
Day and launch of the ‘India Handloom Brand,’
has been pivotal in reviving the sector, making
it technology driven, and positioning it in
mainstream fashion. This is encouraging the
youth to wear more handloom products, hence
increasing the market reach for these products.
The power-loom industry is also growing, with
incentives like financial assistance for
upgrading the technology. Funds up to 50% of
the cost of the up gradation is being provided
by the Government.
FDI Policy
100% FDI is allowed under the automatic route
in the sector.
FDI Inflows
Between March 2014 and March 2016 the FDI
equity inflows in the Textiles sector added up
to USD 427.55 million. FDI equity inflow, grew
by 16% in FY 2015-16 over FY 2013-14.
Details of major foreign investments during April
2014 to March 2016 in the sector are provided
in Annexure I.

Exports
In 2015-16, the share of textiles and apparel in
total exports increased to 15% from 13% in
2013-14. The categories that had the most
growth were readymade garments, wool &
woolen textiles, silk, carpets, coir & coir products
and handicrafts. Textiles and Apparel exports
are estimated to reach USD 62 billion by 2021
from the USD 38 billion in 2016.
1 Traditionally,
India’s key export demand has been driven by
Europe and America, but new markets such as
Iran, Russia and South America are opening up
new possibilities for growth.
Fiscal Incentives
A variety of tax reforms and benefits have been
introduced in the past two years to promote the
sector:
• Merchandize Exports From India Scheme
(MEIS): Launched in April 2015, the MEIS
provides duty rewards to eligible textile and
apparel categories to an extent of 2-5% of
Free on Board (FOB) value. This has now
been extended to all countries and covers
the entire textiles sector. The list of eligible
products and the rewards are at Annexure II.
• Interest Equalization Scheme The
Government has approved Interest
Equalization Scheme on pre and post
shipment rupee export credit for five years,
starting from April 1, 2015. This will provide
relief to the Indian exporters who were facing

considerable competition due to interest
rates being higher than in competitive
countries like Vietnam, China etc.
• Basic Customs Duty (BCD)
• Basic Customs Duty has been reduced to
2.5% for raw materials used in the
manufacture of technical textiles and
specialty fibers and yarns.
• BCD has been exempted on the import of
certain fabrics of value equivalent to 1% of
FOB value of exports in the preceding
year for the manufacturing of textiles
meant for exports, thus helping reduce the
import cost of such fabrics and enabling
Indian exporters to be more competitive.
The list of fabrics exempted from BCD are
at Annexure III.
• Tex-Venture Capital Fund
The fund which was set up in June 2014 as a
SIDBI venture, to last for a period of seven
years with a corpus of INR 35 crore, has
chosen 5 companies for investment and a
sum of INR 13.43 crore has been committed.
Upward revision of duty drawback rates:
All Industry Rates (AIR) of Duty Drawback
has been revised for various products from
November 23, 2015. The revised rate
encourages the industry to follow the
CENVAT route as exporters opting CENVAT
facility would get enhanced drawback rate
and value. This will prepare the textile and
apparel industry for GST when it comes into
force.
Special Textiles Package
The government has approved a INR 6,000 crore
‘special package’ for the textiles sector with the
aim of creating one crore jobs in the next three
years and to attract investments worth USD 11
billion and generate USD 30 billion in exports.
Facilitating Technology up- gradation
With an eye on attracting investment of up to 1
lakh crores and gainfully employing 35 lakh
people, the Government has modified the
Revised Restructured Technology Fund Scheme
(RRTUFS) and has launched the Amended
Technology Upgradation Fund Scheme
(ATUFS), which provides a one-time capital
subsidy for ‘eligible machinery’ for a period of
seven years (starting January 13, 2016). The
scheme has a budget provision of INR 17,822
crore for seven years. INR 3,277 crore have been
released in the form of subsidy over the last two
years. An additional incentive of 10% subsidy is
provided to garmenting units which avail the
Capital Investment Subsidy (CIS) under ATUFS.
The upper limit on the cap on capital investment
subsidy has been increased
from Rs.30 crore to Rs.50 crore. An online
monitoring system to provide a transparent MIS
platform to all stakeholders,
i-ATUFS, was launched on April 21, 2016 for
online implementation and monitoring of A-TUFS.
Under ATUFS, 1001 UIDs have been issued with
a project cost of INR 2,703.60 crore and subsidy
amount of INR 217.14 crore.
Infrastructure Development
Scheme for Integrated Textile Park (SITP)
19 new textile parks have been sanctioned over
last two years with potential to facilitate
investment up to INR 3,300 crores and
employment for 60,000 people when fully
operational under the scheme. 200 new
production units have come up in existing textile
parks (47) in the last two years with fresh
investment of INR 1500 crore and additional
employment generation of 11,000 persons.
Integrated Processing Development Scheme
(IPDS) which provides assistance to textile
processing clusters for setting up Common
Effluent Treatment Plants (CETP) with
environment compliant effluent treatment
technology, have sanctioned 7 projects in the
last two years with an assistance of INR 419
crore covering 3000 SME units.
Mega Textile Clusters
Aimed at setting up permanent marketing
infrastructure, three new Mega Textile Clusters
in Bareilly, Lucknow and Kutch have been
sanctioned and INR 18.30 crore has been
released. Under Handicrafts Mega Cluster
Mission (HMCM), 9100 artisans have been
directly benefited. Two Urban Haat have been
launched in Mammallapuram (Chennai) and
Eluru (AP).
Promotion of organized textile industry in
North East
Ministry is implementing North East Region
(NER) Textile Promotion Scheme (NERTPS) ,
an umbrella scheme (across silk, handloom,
handicrafts, apparel etc.) with a total outlay of
INR 1038.10 crore to promote employment and
encourage entrepreneurship especially amongst
women in the garment sector on a project based
approach. Eight Centres have been set up in all
NER States and Sikkim out of which Centres in
Nagaland, Tripura, Arunachal Pradesh and
Mizoram have been inaugurated.
Scheme for promoting Geotechnical Textiles
in North East Region (NER)
The scheme promotes and utilizes Geo textiles
in development of the infrastructure in the NER
states by providing technological and financial
support for meeting additional costs, if any, due
to the usage of Geo textiles in existing/ new
projects in road, hill/ slope protection and water
reservoirs. The scheme was approved with a
budget of Rs. 427 crore for five years from 2014-
15. Projects worth Rs. 33.83 crore have been
sanctioned for Manipur, Tripura, Maghalaya and
Arunachal Pradesh.
Innovation through Technology
Six Focus Incubation Centres (FIC) under
Technology Mission on Technical Textiles at a
cost of INR 17.4 crore have been set up to help
budding entrepreneurs develop innovative
technical textile products.
FICs are provided with a "Plug and Play" model and
mentored for taking up the innovation on
commercial scale. Industrial sheds with basic
infrastructure/basic machineries are also provided.
The list of these FICs are at Annexure V.
A Focused Incubation Centre has also been set up
in Guwahati to promote digital printing for Jute
products.
Promotion of Handloom
Handloom forms one of largest unorganized subsectors
and is an integral part of India’s textile
sector. It employs around 4.3 million people and the
sector has around 2.37 million handlooms. The
country is seeing a resuscitation of handloom and
the Ministry has undertaken several initiatives to
support this revival. Some of the initiatives are as
below:
• The Hon’ble Prime Minister launched the first
National Handloom Day on August 7, 2015 in
Chennai and the ‘India Handloom Brand’ to
provide brand value to handloom products.
• Foundation stone for a Trade Facilitation Centre
and Crafts Museum was laid by the Hon’ble
Prime Minister on November 7, 2014 in
Varanasi.
• An Integrated Textile Office Complex has also
been setup at the Indian Institute of Handloom
Technology (IIHT), Varanasi to provide a
common platform to all stakeholders including
weavers, exporters and marketing agencies.

• Indian Handloom Website was launched on
February 11, 2016 as a one stop platform for
all services to consumers, bulk buyers and
handloom producers and provides details of
all registered India Handloom producers,
which will enable verification of genuine India
Handloom products by customers.
•A policy framework to promote e-marketing of
handloom products has been developed to
promote marketing of handlooms in general
and to reach the younger customers, in
particular
. Under the policy framework, the
Ministry would collaborate with approved
e-commerce entities in promoting e-marketing
of handloom products thus widening the
existing ambit of institutional collaboration
between the Ministry and e-commerce players
.Ease of Doing Business initiatives
Textiles and Textile Articles imported from
specific countries (European Union, Serbia,
Poland, Denmark, China) are exempted from
testing of samples for presence of Azo Dyes.
(Directorate General of Foreign Trade (DGFT),
September 4, 2015)

Skill Development:
Under the Integrated Skill Development Scheme (ISDS), the Ministry has trained more than 5.3 lakh
youth in textile trades over the last two years, particularly in the garmenting segment. More than 81 % of
persons trained have been placed including 79 % of the trained women.
Year wise break up of total trained and placed under the scheme:

Year Trained Placed WomenTrained WomenPlaced
2014-15 131233 54767 94111 43653

2015-16 219908 188399 171921 139700

2016-17 185542 150197 143158 112988
Total 536683 393363 409190 296341


Annexure I
Major investment in the sector during April 2014 to March 2016


Foreign Collaborator Indian Company FDI inflow (USD million)

E-Land Asia Holdings PTE Limited Fashion India Private Limited 51.94

Procter & Gamble Overseas India B.V., Netherlands,
Procter & Gamble Home Products Ltd. 37.58

Ramunia Investments Limited,Mauritius VAS Data Services Private Limited 29.28
Seiren Co. Limited Seiren India Private Limited 19.57
General Atlanti Singapore Fund PTELtd.AND Designs India Limited 17.07
Celio International S.A., Brussels Celio Future Fashion Limited 16.53
Ahlstorm, Finland Ahlstrom Fiber Composites India PvtLtd.16.42
Toray Industries Inc., Japan Toray Kusumgar Advanced TextilePrivate Ltd.15.61
Everstone Capital Partners II LLC Ritika Private Limited 10.49
HEP Mauritius Limited Genesis Colors Pvt Ltd 9.61
PBR INC d/b/a SKAPS IND Skaps Industries India Pvt. Ltd. 9.51
India Business Excellence Fund-II A Kurlon Enterprise Ltd 8.56
Helion Venture Partners II LLC Vas Data Services (P) Ltd 8.10
Sequoia Capital India Investments IV GO Fashion India Private Limited 7.23
Holidings Ltd Spykar Lifestyles Pvt 6.92
Orange Mauritius Investment Ltd Chiripal Industries Ltd 6.87
OOSTROFIL NV Global Textile Alliance India Pvt Ltd,M/S Global Textile Alliance India PvtLtd 6.30
Tormore Investments Ltd Chiripal Industries Ltd 6.00

Annexure II
List of eligible products and rewards under MEIS:

Eligible Products RewardRate Country Coverage as on April 1, 2015
Amendment in Country Coverage on 14th July, 2015
Amendment in Country Coverage on 3rd Nov, 2015


HS Code 50-60:eligible lines
2%
Cat. A – all countries Cat. B – only Japan
Cat. C – For 112 fabric lines, reward was extended to Bangladesh and Sri Lanka
Cat. A – all countries Cat. B – all countries Cat. C – all countries

HS Code 61-63:eligible lines
2%
Cat. A – all countries Cat. B – only Japan
-
Cat. A – all countries Cat. B – all countries

All handloom & handicraft items
5%
All countries
-
-

All jute, ramie and coir based items
5%
All countries
-
-

Annexure III
The list of fabrics exempted from BCD are as follows:
• Cotton and Elastane blended printed fabrics
• Cotton and metallic yarn dyed blended fabrics
• Cotton and Spandex and metallic blended fabrics
• Cotton and Elastane printed fabric
• Cotton and silk lining fabric
• 100% linen Chambray woven/ dyed fabric
• 100% ramie dyed/ blended printed yarn dyed fabric
• Nylon and spandex lining fabrics
• 100% polyester velvet dyed fabric
• Cotton/ Nylon/ Embroidery crochet lace lining fabric

Annexure IV
Duty Drawback rates
Department of Industrial Policy and Promotion Ministry of Commerce and
Industry

When CENVAT is not availed When CENVAT is availed

Product 2014 2015 2014 2015
Cotton Yarn 2.8-4.7 2.5-4.5 0.9-1.3 1.2-1.4
Cotton Fabric 4.3-7.1 4.3-7.3 1.3-1.9 1.4-2.0
Man-Made Fabric 6.7-9.1 6.6-11.5 1.6-2.4 1.9-2.4
Apparel 7.4-9.9 7.2-10.5 1.7-4.0 2.0-3.5
Home Textiles 2.8-11.7 5.0-10.7 1.6-9.9 1.9-8.9

Annexure V
List of Incubation Centres
Most of the textile and apparel industry does not avail CENVAT


Agency Area of Incubation Centre
Funds Released
(in Rs.) Progress
ATIRA, Ahmadabad Composites 3.42 crore Machines procured and
Installation is underway.
DKTE, Ichalkaranji Non-woven and
Coated Textiles 2.70 crore Machines procured and
Installation is underway.
NITRA, Ghaziabad Protective
Textiles 2.87 crore
Construction of Industrial shed
completed. Procurement of
machinery underway.
PSG COLLEGE OF
TECHNOLOGY,
Coimbatore
Filters, Acoustic
Thermal
Insulators,
Wipes
2.85 crore Tenders finalized. Machineries
being procured.
SASMIRA, Mumbai Agrotextiles
and Packaging 3.00 crore Tenders floated for machinery.
SITRA ,Coimbatore Medical
Textiles 2.61 crore Tenders finalized. Machineries
being procured.

Contact Us
Department of Industrial Policy and Promotion,
Ministry of Commerce and Industry,
Udyog Bhawan, Rafi Ahmed Kidwai Marg,
Rajpath Road Area, Central Secretariat,
New Delhi, Delhi 110011
http://www.dipp.nic.in
Knowledge Partner : KPMG
Building No. 10, 8th Floor, Tower B & C,
DLF Cyber City, Phase II,
Gurgaon, Haryana 122 002
https://home.kpmg.com/in/en/home.html

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