After the closing of Orient Craft, Ranchi and Triveni Apparels, Hazaribagh, now there are some positive indications in the garment industry of Jharkhand. Few recent developments have created hopes for those garment manufacturers who either have factories there or are planning to set up their units in the region. Good thing is that while earlier the industry had a fear of policy change, it is now clear that policies will remain the same. Secondly, the subsidy – which is the biggest attraction for the industry to enter Jharkhand – has been pending for the last one year. And there are some indications on the same also. Leading apparel manufacturers like Arvind Ltd., Matrix Clothing and Kishor Exports have made it quite clear that they are for the long term in Jharkhand. And the biggest point is that the Chief Minister Hemant Soren himself has assured the industry of all kinds of support.
The aforementioned positive signs and changes have been experienced mainly after few meetings between the industry stakeholders and the State Government/administration. At the same time, the issue of human trafficking is growing in the state, owing to which, the State Government has realised that providing enough and good jobs would be an effective solution to this challenge. And there can’t be a better option than apparel industry for the same!
Last month, few leading apparel manufacturers had a meeting with the Chief Minister of State Hemant Soren. Apparel Resources contacted few of these industry representatives who were part of the meeting.
Deepak Agarwal, MD, Kishor Exports; Ankur Trivedi, Head, Corporate Affairs, Arvind Ltd; Adarsh Sharan CEO, Matrix Clothing, Gurugram told Apparel Resources that they shared with the CM how the garment industry can contribute to the growth of the state, especially for job creation. According to them, the CM was quite positive during the entire discussion.
“One has to understand that the new CM took oath in the last week of December 2019, and COVID-19 began spreading across India in March 2020. So, things got a little delayed, but now the good thing is that the Government assured us of its full support,” said Deepak Agarwal, who owns two units in Ranchi, employing around 800 workers.
As far as the issue of subsidy is concerned, no clear date has been given by the state officials. But it seems that with the assurance of support by the top-level authorities, now the industry is not much worried about this issue.
Ankur Trivedi shared with Apparel Resources, “The subsidy issue is very much there, as we have not received the same for the last one year. We had a meeting in this regard with senior officials and shared our points in detail. As of now, we don’t have any idea as to when it will be released, but the dialogue has opened up and we hope for the best. Whatever the case may be, Arvind Ltd. has serious plans to stay in Ranchi for the long term.” He further added that the State Government should assure to develop a complete ecosystem for the industry. Currently, the company doesn’t have any expansion plans in Ranchi.
The issue of subsidy is extremely important for garment manufacturers, as 4 years ago, the State Government had announced major incentives under its textile policy for the industry putting units here like employment generation subsidy of up to Rs. 7,000 for every employed person for 7 years. (It brings down wage bills by 40-50 per cent). Along with that, it also includes 7 per cent interest subsidy and 20 per cent capital subsidy on a cap of Rs. 50 crore, 50 per cent reimbursement of power tariff for 7 years from the date of the release of electricity connection along with 100 per cent electricity duty exemption for 7 years, which translates to around Rs. 2.5 per unit to get uninterrupted power supply.
Looking at the current scenario, when companies are struggling for liquidity, not releasing subsidy had become a major issue. Orient Craft, the flag bearer of the apparel industry in the state, still has Rs. 33 crore of subsidy pending.
It is pertinent to mention here that the issue of human trafficking in Jharkhand has also pushed the State Government to focus on the apparel industry as there were cases involving women trapped in trafficking in the name of jobs being offered in the apparel industry of states like Tamil Nadu and Surat.
Just a few days ago in Ranchi, the police saved 17 women (including one minor) who were reportedly being trafficked after being promised jobs of sewing operators in a garment factory of Tamil Nadu. Last month, around 30 women (including six minors) were rescued from Surat after they were assured of being provided stitching training, but were then forced to work in a fish packaging unit under inhuman conditions.
The Chief Minister handed over appointment letters to 22 women who were rescued recently. Now, these women will work at Kishor Exports.
Another good thing is that this positivity is motivating the local and new entrepreneurs also. Ashwathy Garments is a new factory in Ranchi started by local professionals who are quite motivated with the Government response as well as the availability of trained workforce in this region.
Harish Mishra, CEO of the company, told Apparel Resources, “Yes, the Government seems fully supportive, and we have also got assurance of all kinds of full support. And we are happy as there is no change in policies, so we are hopeful about growth opportunities.” The company, having a small setup as of now, has expansion plans in the near future.
We must underline here that the Chief Minister has also claimed that at least 8,000 jobs will be created in the apparel industry in the next few months. He is now well aware that around one lakh people of Jharkhand have had their fair share of experiences in the apparel industry, which can be a strong point for factories in the state. But what would be the blueprint of the State Government to create 8,000 jobs in the next few months is still unclear. The state administration has not replied to Apparel Resources’ queries in this regard.
“Overall, the apparel industry in India is struggling a lot, so this may not be the right time to comment on the apparel industry in Ranchi. Yes, there is still a long way to go in the state, but a factory is not a small setup to shift anywhere else, so the best strategy is to manage with the time and response of the Government, which now seems positive,” said a top-level exporter running a unit in Ranchi, on the request of anonymity.