Inter-state business investments are not a new phenomenon in India. The Uttar Pradesh Government’s upcoming UP Investors Summit, slated to be held on February 21 and 22, is also yet another step to attract industrialists from other states to invest in UP.
Notably, a delegation of the UP Government recently visited the country’s textile hub Tirupur to invite the local textile industrialists to the aforesaid conclave and to encourage them to set up manufacturing units in their state. The delegation also met with the members of South India Hosieries Manufacturers Association (SIHMA) in this regard.
Apparel Resources caught up with Shashi Prakash Agarwala, Joint Secretary of SIHMA, to gauge the mood of Tirupur’s hosiery manufacturers and to know if they are actually considering expansion into UP.
The dialogue broadly revolved around the UP Government’s policies related to the garment industry and the support being offered to the manufacturers to initiate hassle-free manufacturing operations over there. The members’ reactions are rather positive overall, Agarwala elucidates.
However, the officials could not meet all big exporters due to time paucity, and hence, the issue of export production was not discussed, he added.
“The hosiery manufacturers that cater to the domestic market, in particular, are quite interested in the opportunity – some of them already have a market in UP or are looking to reach out nationally especially the North Indian market,” Agarwala further described.
Some members of SIHMA are going to attend the UP Investors Summit. However, this does not mean that they are moving out of Tamil Nadu and shifting their base to UP. They are only branching out to expand their existing manufacturing capacity and to tap into the broader geography, he clarifies.
As of now, 15-20 Tirupur hosiery manufacturers are actively seeking expansion into UP and are pursuing environment clearances to set up their manufacturing units. The State Government has assured that the permits and clearances will not be an issue, Agarwala reveals to Apparel Resources.
“At SIHMA, we are looking at setting up some 30-40 units in UP. Each unit will entail an investment of around Rs. 30-40 crores, which means, the total initial investment would come around to some Rs. 500 crores which may eventually go up to anything between Rs. 3,000 to 4,000 crores,” he informed us.
Agarwala further says that the trade association also wants the UP Government to provide infrastructural support that includes leased land with all the amenities as needed or subsidised land rates and funding for required facilities.
So while the member-manufacturers seem gung-ho over the opportunity, they as well have some apprehensions. As per Agarwala, the law and order environment in UP is a huge concern and the uncertainty regarding the future state of affairs daunts them.
In Tamil Nadu, over 60 per cent of the garment industry labour comprises females, he notes. The female workers are more suited for garment manufacturing as they are more swift and precise. Although UP has a large labour pool, the skilled labour is skewed in favour of male workforce. Labour is another major issue, therefore.
Moreover, the association also feels that that UP Government’s offer as regards subsidies on plant and machinery labour support and training, etc., is not adequate enough and seeks some extra benefits.
However, Agarwala is convinced that if permits and clearances are given in 3-4 months’ time and everything goes well, the garment units could be up and running in the next 6 months to 1 year. The garment manufactures, who are actively considering this opportunity, are already established manufacturers and brands that have the required financial capacity and market standing to start operations immediately.
Besides UP, more than 10 other states have also presented investment opportunities to Tirupur textiles industrialists. SIHMA is evaluating all such proposals at hand and will soon share a brief of their key requirements to the UP Government, he shared.
