The experts unanimously opine that making entrepreneurship the religion of the state will allow players to fail and the government to be more forgiving (as China did for a decade to unleash the animal spirit) if the textile industry is to be revived to its old charm and glory once the Indian textile industry enjoyed globally, considering that there is an insane amount of hype around India veritably getting labeled today as a 'Friendly/ friend-shoring and trusted partner' and sourcing hub and how could textiles be any different penciling in a lot of optimism riding on this sector.
As we dial into the new policy the thrust areas are:
The spotlight shifts to promising Technical Textiles which come with multiple use cases, including the Apparel sector with a sharp focus on the job creation piece of this story, and drawing serious attention to manufacturing excellence factoring in the concern that very little attention has been paid to this sector.
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Inevitably there is no running from the fact that the structural contour of the sector is that, it is outnumbered by MSMEs of the world which has its pros and cons.
The latest policy comes out with a clear focus on the People, Process, and Technology (especially when everybody is talking about AI) side of the business as the argument is that the train has already left the station.
The good news is for the core processes such as weaving and dyeing, the policy offers capital subsidies in the range of 10 percent to 35 percent of eligible fixed capital investments, with a defined cap of Rs 100 crores, depending on the region and activity to reduce the variability, so that policy is on the even keel.
Additionally, given that textiles have already been commoditized to death, the catalytic policy also enumerates offering an edit-linked interest (ELI) subsidy taking it from 5 percent to 7 percent for a legitimate duration of 5 to 8 years, with a restriction of an annual limit of 2 percent to 3 percent to give a meaningful fillip.
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To give an impetus to lasting textile legacy, yet another optimistic sop offered is businesses will also receive Rs 1 per unit of electricity for a five-year (5) period, applicable to power sourced from "Discoms or renewable energy" (thriving to make the process green); hopefully, it should be a shot in the arm to make it a value sector rather than only a growth sector.
The economics of employee happiness | Yes, people are at the heart of any business therefore, for employees the policy comes out with an offer providing a wage assistance/salary increase of Rs 3,000 to Rs 5,000 per month (PM) for women and Rs 2,000 to Rs 4,000 for men respectively, based on their roles and responsibilities.
Incentivisation theme; Again, it also provides Self-help group (SHG) members with funds of Rs 5,000 per month (PM) for three (3) months of training/skilling and payroll support of up to a reasonable 25 percent of job work turnover for five years (5) with the primary goal of incentivizing the workforce for the mutual meaningful gains in any business enterprise.
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The policy also incredibly addresses pivotal quality certification, energy and water conservation savings spurring cost efficiency only to make businesses more globally competitive given the competitive landscape, and technological advancements knowing that today tech is both an enabler and equalizer by providing technology acquisition support.
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A striking feature of the policy is to underline the merit of making the sector more invested underpinning its focus on new industrial units creating jobs/employing at least 4,000 registered workers under the Employee Provident Fund (EPF) scheme, with a caveat of at least 1,000 of those employees being women in its larger seminal goal of women empowerment and gender equality in this sector.
Notably, these units will be provided with capital subsidies of 25 percent to a reasonably high 35 percent, with a rider of being capped at Rs 150 crore, along with credit-linked interest (CLI) subsidies of 7 percent to 8 percent for up to a period of eight years (8), with a defined precise annual cap of 3 percent.
Further, the policy states to offer incentives entailing among others electricity tariff subsidies, with a cap of maximum annual limit going up to Rs 15 crore for group captive renewable energy sources in the direction towards both sustainable businesses and sustainability per se.
Let us labour on what is enumerated in this policy regarding the wage structure, female employees in these units are to be paid wage assistance in the range of Rs 3,000 to Rs 5,000 per month (PM), while male employees/counterparts are to receive Rs 2,000 to Rs 4,000 for up to ten years (10).
The policy underpins the bull case of boosting employment and building competitiveness and resilience in the textile sector given that the sector today's legs to grow, self-help groups (SHGs) will also receive financial support giving them access to easy financing in similar categories.
The sector is poised to grow, notwithstanding the global geopolitics, and challenging operating environment, and given global trade has been shrinking in recent years and expected moderation in growth.
Dive into India's thriving textile industry, a global powerhouse targeting a $250B market by 2030. An ideal investment prospect for discerning investors!...Source: Invest India
Textile is a good place to be; however, with a 12% exponential CAGR in domestic sales, the industry should reach a production level of. US$ 350 billion by 2024-25 from the current level as per "Ministry of Textiles (MOT)" sources provides the sector a parallel market to survive and thrive to have the full effect of growth.