Last year, after many meetings and discussions between industry representatives of Ludhiana (Punjab) and Bihar Government officers, it was abuzz that Ludhiana apparel manufacturing industry is moving to Bihar. Reason was as usual. One state of India offered more incentives and overall support, as compared to the other. Though, some stakeholders did have their apprehensions at that time.
A year later, history seems to repeat itself, and the only difference is, the concerned states are Tamil Nadu and Andhra Pradesh. It is pertinent to mention here that Tamil Nadu, an established textile hub right from spinning to garment manufacturing shares border with Andhra Pradesh where textile industry, especially garment manufacturing, is comparatively very less.
Andhra Pradesh is now luring textile and apparel manufacturing industry of Tamil Nadu. In fact, a group of Tirupur (Tamil Nadu) based textile players, is in the process to visit Andhra. Already a meeting between these textile companies’ owners and Andhra’s state officers had taken place.
Andhra Government is promoting its Kakinada special investment region and for that it has been offering various offers and subsidies. Apart from these supports, Kakinada Industrial Park too has some natural advantages, like is is spread in 8500 acres of land, has proximity to a commercial port and has railway goods facilities.
It is a well-known fact the garment manufacturing industry can’t grow in the silo as it needs fabric, trims, trained workforce (mid-level professionals as well as workers), allied services like dyeing, washing and printing along with job-workers for such services. So, states are trying to create such system where all stakeholders can invest. Keeping this in mind, officers of Andhra Pradesh have committed to Tirupur’s dyeing industry that the state government will itself build Common Effluent Treatment Plant (CETP) for the same. As international brands and buyers are more concerned about compliance, Zero Liquid Discharge (ZLD), which cost huge investment, is a must.
One of Tamil Nadu’s government officials, told Apparel Resources, that they are in touch with apparel manufacturers and asked them to wait for some days to take any decision as the state’s textile policy is in the process to finalization.
Textile and apparel, being one of the major industries for creating job opportunities, is a focus for many Indian states. Recently J. Krishna Kishore, CEO, Andhra Pradesh Economic Development Board (APEDB) also gave a presentation in national capital focusing that how Andhra Pradesh was weaving the future of textiles.
Ground Realities and Result So Far
Besides all the sops and offers, it is very difficult to develop an industry in a new hub/emerging state. In case of Bihar and Ludhiana, it was claimed that there are possibilities of investing nearly Rs. 500 crore in a cluster form. KG Exports, Million Exporter and Orient Dyeing & Finishing Mills had announcements to invest in Bihar but even after an year, nothing has happened.
“Yes, its more than one year but not even a single factory has started in Bihar from Ludhiana-based apparel manufacturers. The officer, who was in touch with us, has been transferred and things delayed.” Harish Dua, President, Knitwear and Apparel Exporters Organisation; Ludhiana and MD, KG Exports.
Buyers partnership and DNA needs to develop with long term vision
“Yes, various states are fighting to bring investment especially after the trend of ‘Investor Summit’ has picked up. Till some extent, it is in the favour of industry too but states, as well as the industry have to understand that just incentives can’t establish and develop cluster until they develop DNA of established hub at new places as plug and play system can’t work. All have to ensure comprehensive growth otherwise none of the incentives will work. Such investments should develop as partnership with buyers as buyers can exploit to pass the inventive received by the apparel manufacturer. If one or two factories move from Tirupur to Andhra Pradesh, that is individual case and does not matter.” Raja Shanmugham, President, Tirupur Exporters’ Association (TEA)
Country Focused Approach
“There is a need to have a country focused approach as against the State level policies which is leading to tax-payers hard earned money being used where it is not required at all and less money is getting allocated to the deficit sectors. Hence, States need to be prudent in incentivising investments by focusing on thrust areas where the States have dearth of policy support,” Sanjay Jain, Chairman, Confederation of Indian Textile Industry (CITI)
Subsidy by Andhra Pradesh
- 25% subsidy for any capital investment
- 8% interest for bank loans availed by companies, will be paid by the Government
- Rs 2 in electricity tariff per unit will be reduced by the Government