The government’s focus on supporting startups in this sector aligns with its broader goal of promoting innovation and entrepreneurship in the country.
The Union textiles ministry is planning to provide grants of up to Rs 50 lakh each to 150 startups engaged in producing technical textiles such as Kevlar and Spandex.
The ministry will not seek any share of the profits generated from these businesses.
This funding is part of a Rs 375 crore allocation for FY25 from the National Technical Textiles Mission (NTTM).
Technical textiles like Kevlar, Spandex, Nomex, and Twaron are used in sectors such as aerospace, defence, automobiles, healthcare, construction, and agriculture.
According to a KPMG report, the Indian technical textiles market is the fifth largest in the world, valued at $ 21.95 billion in 2021-22, with production worth $ 19.49 billion and imports at $2.46 billion. Over the past five years, the market has grown at 8-10 per cent per annum, and the government aims to accelerate this growth to 15-20 per cent over the next five years.
The global technical textiles market was estimated at $212 billion in 2022 and is projected to reach $274 billion by 2027, growing at a CAGR of 5.2 per cent from 2022-27, driven by increasing cross-industry demand and the rapid development of new applicative products, according to the KPMG report.
The government’s focus on supporting startups in this sector aligns with its broader goal of promoting innovation and entrepreneurship in the country.
Additionally, the textiles ministry has relaxed the royalty cap on this scheme. Typically, fund providers take a percentage of the profits a startup earns as ‘royalty’ in return for their investment. This relaxation is expected to facilitate the growth of startups, one of the aforementioned individuals stated.
Towards global leadership
NTTM was launched in 2020 with the aim of positioning India as a global leader in technical textiles by promoting research, innovation, and the use of technical textiles in various sectors.
Furthermore, the government has introduced a production-linked incentive (PLI) for textiles, the PM MITRA Parks scheme, quality control regulations, and developed over 500 standards to promote technical textiles.
Startups interested in availing of the fund will need to deposit 10% of the total fund allocation in advance. For instance, to receive Rs 50 lakh from the ministry, a startup must deposit Rs 5 lakh of its own funds. This Rs 5 lakh will not be deducted from the Rs 50 lakh fund.
Currently, 10 startups are set to be approved next week, with the remaining startups to be selected in phases over the next few months.
News source: Mint