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PM MITRA parks to generate $ 6 bn investments

Oct 22, 2021
PM MITRA parks to generate $ 6 bn investments

PM Mega Integrated Textile Region and Apparel (PM MITRA) scheme is expected to bring fresh capital investment of $ 5.5-6.0 billion and in turn create export opportunities of around $ 4.5-5.0 billion p.a. for textile products once the scheme is fully implemented, according to a CARE Ratings report.

The Indian textile and apparel industry employs around 45 million workers and contributes 11%-12% of the country’s exports. During FY22 (April 01 to March 31), the size of Indian domestic textile and apparel industry is expected to be around $ 95 billion, while the export is expected to be around $ 38 billion.

In order to boost textile exports, to generate employment and to create level-playing field for Indian exporters in global market, the Government of India (GoI) has already announced various incentives/ schemes and the PM Mega Integrated Textile Region and Apparel (PM MITRA) park is another step towards increasing competitiveness of Indian textile globally.

CARE Ratings estimates investment potential of $ 0.8-0.9 billion for each park considering 50% of land available for manufacturing function and balance towards common utilities (assuming total land area of around 1,000 acres per park). An announcement was made by GoI for the setting up of seven PM MITRA parks with integrated facilities including plug and play infrastructure on land of over 1,000 acres with an aim to generate employment. Ten state governments, including Tamil Nadu, Punjab, Andhra Pradesh, Gujarat, Rajasthan, Madhya Pradesh, etc., have expressed their interest in the scheme.

The Central Government will provide maximum Development Capital Support (DCS; @30% of the Project Cost) up to Rs 500 crore to each greenfield PM MITRA Park and up to Rs 200 crore to each brownfield PM MITRA Park. Moreover, the Central Government would also provide Rs 300 crore of competitiveness incentive support (CIS) to each PM MITRA Park for early establishment of textile manufacturing units.  Background Setting up of PM MITRA parks is based on the 5F vision of the Hon’ble Prime Minister - Farm to Fibre to Factory to Fashion to Foreign.

India has the distinct advantage of having adequate raw material and large labour workforce which shall augur well for grabbing the export opportunity. Furthermore, ready availability of raw material reduces transportation cost and lead time, thereby providing cost-effective solution to the customers. The Scheme for Integrated Textile Parks (SITP) was launched in FY06 to provide the industry with infrastructure facilities for setting up textile unit which was further extended till FY20. However, the scheme has not given intended results due to various issues and challenges. The GoI has now taken corrective steps while introducing PM MITRA scheme based on lessons learned from SITP. Till date, 74 parks have been sanctioned under the SITP.

  

As depicted in the above table, the PM MITRA parks aim to overcome some of the shortcomings of SITP, thus having better chances of success.

Source: Care Ratings

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