PM Mega Integrated Textile Region and Apparel (PM MITRA)

Context: The Centre has selected sites in Tamil Nadu, Telangana, Karnataka, Gujarat, Maharashtra, Madhya Pradesh and Uttar Pradesh to set up mega new textile parks, a year and a half after the PM MITRA scheme was announced.

About the PM Mega Integrated Textile Region and Apparel (PM MITRA) Scheme

• Launch: The scheme was first announced in the union budget speech of 2021-22, under which seven mega textile parks are proposed to be set up to make Indian textile sector globally competitive.
  • Mega Textile Parks are designed to integrate the entire textile value chain, from spinning, weaving, processing/dyeing and printing to garment manufacturing, all within a single location.
• Objective: The main objective of the Mega Textile Parks is to create an ecosystem that promotes competitiveness, productivity, and innovation in the textile industry.
• Outlay: The total outlay for the project is ₹4,445 crore, though the initial allocation in the 2023-24 Budget is only ₹200 crore.
• Key features of the scheme:
  • 5F Vision: The PM MITRA scheme is Inspired by the 5F vision – Farm to Fibre to Factory to Fashion to Foreign.
  • PM MITRA park will be developed by a Special Purpose Vehicle which will be owned by the Central and State Government and in a Public Private Partnership (PPP) Mode.
  • The Ministry of Textiles will provide financial support through development capital support up to Rs. 500 crores per park to the Park SPV.
  • A competitive incentive Support (CIS) of up to Rs 300 crore per park to the units in PM MITRA Park shall also be provided to incentivise speedy implementation.
  • Each MITRA Park will have an incubation centre, a common processing house, a common effluent treatment plant, and other textile-related facilities such as design centres and testing centres.
  • Sites for PM MITRA Parks will be selected by a Challenge Method based on objective criteria.

• Significance of the scheme:
  • Reduce Logistics Cost: It will reduce logistics cost and strengthen the value chain of the textile sector to make it globally competitive.
  • Investment and employment generation: The Centre envisages an investment of nearly ₹70,000 crore into the parks, with employment generation for about 20 lakh people.
  • Self-reliance: It aspires to fulfil the vision of building an Aatmanirbhar Bharat and to position India strongly on the Global textiles map.
  • UN SDG9: The parks will help India to achieve the UN Sustainable Development Goal 9: “Build resilient infrastructure, promote sustainable industrialization and foster innovation”.

Overview of Indian Textile Industry

• Textile sector contributes 2.3% to Indian GDP, 7% of the Industrial Output, 12% to the export earnings of India.
• India is the largest producer of cotton & jute in the world, the second largest producer of silk in the world the 6th largest producer of Technical Textiles.
• 95% of the world’s hand-woven fabric comes from India.
• India has a share of 5% of the global trade in textiles and apparel.
• It provides direct employment of over 45 million people (21 % of total employment) and source of livelihood for over 100 million people indirectly.

Locational Factors for the Textile Industry

• Six geo-economic factors on which the localization of textile industry depends are as follows: 1. Climate 2. Power 3. Raw Material 4. Labour 5. Transport 6. Markets.

Challenges faced by the Textile Sector in India

• High fragmentation: The textile industry in India is characterized by high fragmentation, with the unorganized sector and small and medium enterprises dominating the sector.
• Infrastructure bottlenecks: Inadequate infrastructure, such as poor transportation facilities and power shortages, increases the cost of production and reduces the competitiveness of the Indian textile industry.
• Technology Obsolescence: Many textile units in India still use outdated technology, making them less competitive than their counterparts in other countries.
• Highly competitive export market: In the global market tariff and non-tariff barriers coupled with lack of free/preferential trade agreements are posing a major challenge to the Indian textile Industry.
  • There is fierce competition from China, Bangladesh and Sri Lanka in the low-price garment market.
• Impact of Goods and Services Tax (GST): GST has created distortions in the Textile and Apparel sector in India, impeding its competitiveness.
  • For instance, man-made fibres (MMF) are taxed at 18 per cent for fibre, 12 per cent for yarn and 5 per cent for fabric. This inverted tax structure makes MMF textiles costly.
• Environmental issues: Textile processing, which heavily relies on non-biodegradable chemicals and consumes vast amounts of water, poses significant environmental challenges.

Initiatives by the Government for Growth of Textile Industry

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