The government has announced the Mega Investment Textiles Parks (MITRA) scheme in this Budget. Here, find the possible reasons behind it, along with its potential beneficiaries.
09-Feb-2021 •Rajan Gulati
With an aim to double the textile industry size to $300 billion by 2025-26, the government in this Budget announced the development of seven mega textile parks with plug and play facilities over the next three years. Under this concept, all regulatory clearances are to be put in place before the project is awarded to private developers. Mega Investment Textiles Parks (MITRA) scheme is being launched in addition to the Rs 10,683 crore PLI (Production-Linked Incentive) scheme for man-made fibre garments and technical textiles, launched earlier. The textile parks would be set up on 1,000 acres of land and will have uninterrupted water and electricity supply, common utilities and R&D labs. The idea of such textile parks is on similar lines as of the parks that already exist in China and Vietnam. The government aims to boost employment and exports through this scheme.
What was the need of this scheme?
To boost textile infrastructure, the government had launched a scheme for integrated textile parks (SITP) in 2005, as per which the textile units were to be developed under a PPP model. However, till date only 22 textile parks under this scheme have been completed. Delays in obtaining land and other statutory clearances from the state governments, along with slow fund mobilisation, has led to slow progress, prompting the government to launch MITRA parks.
Moreover, over the years as the apparel manufacturers and exporters have moved out of China due to the rising cost of labour, India has been losing out on the opportunity to host them to the neighboring countries of Bangladesh and Vietnam. This is due to the low labour costs and benefits arising out of trade agreements available there. However, the textile industry is a very critical industry and is among the top employers in India, employing around 45 million people directly and another 60 million in allied industries. Therefore, a scheme like MITRA is vital to the economic development of our country.
The MITRA scheme should be seen in light with the PLI scheme announced for the textile sector in November last year.
Some of the key players in the man-made fibre segment in India that can benefit from the above-mentioned government schemes are: