It’s indeed a million dollar question as to whether Bihar will be the next apparel manufacturing hub since it recently became a point of attraction for the textile and apparel industry following the launch of its first-ever textile and leather policy.
Prior to the launch, the then Minister of Industries, Bihar Syed Shahnawaz Hussain (who also used to be Union Minister of Textiles two decades ago) put in lot of efforts to understand the industry’s requirements and priorities and tried to prepare policy accordingly. These efforts to attract industry in Bihar became intense after May 2022 when the policy was launched officially, with the Minister holding several important meetings with the industry, and trade bodies across India.
However, political developments thereafter caused setback to the opportunities for the textile and apparel industry in the state, and since then – especially in August and September – there hasn’t been any movement towards that end in the state. In fact, the state seems to be losing its charm and momentum for the industry.
What states lack when it comes to the establishment of textile and apparel industry?:
- No continuation or follow-up on policies
- No hrust on development of entire supply chain
- Dependent mainly on officials rather than on systematic working
- Lack of focus on plug- and-play model, multi- storeyed factories
Notably, industry stakeholders too agree with this. Hailing from Bihar, Akhilesh Anand, MD, Carnation Creations (a leading apparel manufacturer with state-of-the-art apparel manufacturing unit in Coimbatore) and few other industry stakeholders in his circle were enthusiastic to start their units in their home state, but after these recent developments, they are in doubts to take up any such initiative.
Even if one keeps aside the political aspect, another major question is regarding the other states like Jharkhand, Telangana, Odisha, Andhra Pradesh (except Brandix India Apparel City), which are also offering lucrative policies and few of their individual strengths too, but have failed to attract the apparel manufacturing industry in a big way so far. See the example of Ranchi ( Jharkhand), where despite the availability of local labour, only a few organised players like Arvind, Kishor Exports, Matrix Clothing, Valencia Apparels are managing their operations and that too with a lot of struggle.
Telangana did manage to attract Kitex Group, which was mainly because of personal intervention of the state’s top leadership. Other garment manufacturing companies that are in the process to start operation in the state are Gokaldas Images and Texport Industries only.
Not only ‘emerging’ states, even established ones like Karnataka and Punjab have also failed in the past to attract fresh investment from existing companies or companies from other states.
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In 2019, a report by the Comptroller and Auditor General of India (CAG) had said that Karnataka policy’s target of achieving Rs. 10,000 crore investment and 5 lakh job creation (in textile and apparel industry only) has not yet been successful. There has been a shortfall of 63 per cent and 76 per cent, respectively.
Lack of consistent, smooth execution of policies over the years is a major reason that various states couldn’t establish the apparel manufacturing industry at a good level.
To be more specific, delay in subsidies’ clearance has been a major failure at the state’s end.
“Garmenting is one of the most promising sectors for the state and we are working towards that. The land allotment is open for textile units in the best located BIADA industrial area in Bihar, Sikandarpur, Bihta which is only 30 km from Patna airport.” Sandeep PoundrikPrincipal Secretary Industries, Bihar
The seriousness of this issue can be seen from the recent meeting of Syed Shahnawaz Hussain with around 20 top apparel export houses like Shahi Exports, Pearl Global, Richa Global to name a few; Narendra Goenka, Chairman, AEPC too has prominently raised the issue of immediately providing the subsidy, given under the policy.
The same was once a major issue in Jharkhand creating challenges for whatever units were operational there.
The companies had not received their dues for a year, with a leading company having subsidy pending worth Rs. 33 crore.
Similar was the case in Punjab where the companies which had shown keen interest in expansion or announced fresh investment, took a step back as they couldn’t get support regarding change of land use (CLU), return of state’s portion in GST and subsidy on electricity usage.
No thrust on the development of the entire supply chain and ecosystem is also a reason why most of the companies don’t prefer to go to emerging states, and even if they try, they find it difficult to succeed.
From core raw materials like fabric, to every small part of trims, these states completely lack all the materials and factories have to arrange these on their own. Similarly, unlike established hubs, it is also hard to find good mid-level management for factories in emerging states. It has been noticed that if there are resources to train mid-level management, most of the professionals either work in metro cities or in wellestablished hubs.
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Bihar has tried to address this issue to some extent with continual focus on value addition to post-production of powerloom, incentivising the big units from hosiery and textile processing segments – besides having thrust on cluster approach, plug-and-play, multistorey sheds.
Sectors like spinning, weaving, knitting, processing, dyeing and printing have also got thrust in the state’s policy. To ensure business development, the policy also has thrust on R&D facilities, design studios/facilities for prototyping, quality testing, labs, etc., for textile units.
The presence of powerloom weavers’ community in the state can be an important asset in terms of the availability of skilled and semi-skilled workers for textile units. However, what’s solely missing is the the aggressive approach of the Government and that too at this important juncture – not to mention state officials yet again lacking in efforts to attract the industry.
In 2018, Bihar’s officials had earlier also made efforts to attract the industry when they had industry interaction in Ludhiana and there was buzz that a group of Ludhiana’s textile industry will definitely invest in Bihar, but, sadly, nothing could come out of the discussion.
One of the leading entrepreneurs of the city, who was present in a very recent meeting with the Bihar officials, told , on the request of anonymity, “We were invited to visit Bihar to have a first-hand feel and we were also planning to visit the state but now with the change of guard, things are back to where they were earlier.”
If the State Government officials don’t work aggressively on all fronts, it will again lose the opportunity and momentum as well as the trust of the industry.
What Bihar has:
- Ample land bank
- Trained Resources (NIFT, ATDC and Footwear Design and Development Institute (FDDI) at Patna)
- Patna’s proximity to Kolkata’s port (around 600 km only)
- Skill development subsidy to eligible units @ 20,000 per employee per annum
- Skilled workforce (forced to work in other states) and skill mapping of workers
- If opting for capital investment of up to 10 crore, 15 per cent incentive is provided to set up plant and machinery
- 2 per unit electricity subsidy
- Monthly grant to workers of 5,000 for 5 years
- 30 per cent transportation subsidy, in addition to 10 lakh carriage (of raw and finished materials) subsidy annually for 5 years