PM MITRA parks to generate $ 6 bn investments

PM MITRA parks to generate $ 6 bn investments

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.

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.

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