An overview of the Textile Industry in India
The strength of the Indian textile industry is its massive production of natural fibres such as cotton, jute, silk and wool. Accompanied bya huge production capacity of manmade fibres like synthetic polyester, viscose, nylon and acrylic fibres and yarns, India is the 2ndbiggest textile market only behind China and amongst the largest exporters of textiles and apparel too, and the products are manufactured domestically and have strong demand in the international market too. While Cotton production in India is projected to reach 72 lakh tonnes by 2030, this will further lead to strong demand in the domestic and international markets due to the increase in demand for consumer items like clothing, bags, upholstered furnishing etc. The industry can be broadly grouped into unorganised sectors: handloom, handicrafts and sericulture. These segments are generally operated on a small scale through traditional methods and the use of tools. The second category is the organised sector consisting of business activities like pinning, apparel and garments segment, which apply modern machinery and economies of scale for producing textiles. The growth of Indian E-Commerce companies has also expanded the opportunities for the Indian textile industry in the domestic and international markets. So, to step into this business, the entrepreneur must have a fair idea of the various types of textile industries in the country and their scope and advantages. Through this article, we will be learning the scope and opportunities in this business and how one can easily set up a textile industry. So let’s begin by understanding the segmentation in this industry, which is as follows
Cotton Textile Industry: It is the most widely distributed industry in terms of geography and is prevalent in states like Maharashtra, Madhya Pradesh, Gujarat, Tamil Nadu, Uttar Pradesh, Karnataka, Andhra Pradesh, West Bengal, Kerala, Haryana and Punjab.
WoollenTextile Industry: Top states producing woollen textiles include Haryana, Rajasthan, Uttar Pradesh, Punjab, Maharashtra, and Gujarat. This industry is comparatively small when compared to cotton in the country.
Silk Textile Industry: This particular industry has a high potential for profits due to the demand for Indian silk in the international market. Accompanied by low capital investment and lucrative margins for the silk growers, the industry has enormous growth opportunities in leading states in silk-producing states like West Bengal, Karnataka, Andhra Pradesh, and Tamil Nadu.
Jute Textile Industry: the jute textile industry is export-oriented and second to the cotton industry in the country in terms of production. This business is prevalent in the country's eastern regions, particularly West Bengal.
Advantages of setting up a textile industry in India
India's textile manufacturing market enjoys a comparative advantage in terms of cost of production relative to major textile producers due to the skilled workforce. The Indian textile industry presently contributes around4 per cent to GDP, around 14 per cent to industrial production, 17 per cent to the country's exports, and 21 per cent to employment, which hints at significant growth potential.
A 100% Foreign Direct Investment (automatic route) is allowed in textiles. Production-linked Incentive (PLI) Scheme worth Rs. 10,683 crores and 1.44 billion USD for man-made fibre and textiles over a five-year period have been earmarked. The government also notified a uniform GST rate of 12% on man-made fabrics (MMF), yarns and apparel, which came into effect on January 1, 2022, that will further boost the demand of textile businesses.
To attract private equity the government has introduced various schemes such as SITP, i.e. the Scheme for Integrated Textile Parks, TUFS or Technology Upgradation Fund Scheme and MITRA or Mega Integrated Textile Region and Apparel Park scheme that is incentivising textile facilities in various states. Under the scheme, 7 Mega Textile Parks will be established over three years.
Licences and Documents needed to establish a Textile Industry
The textile industry of India is both capital and technology-intensive and comparable with automobiles, computers, semiconductors and heavy machinery industry due to its size. However, when it comes to setting up a textile business, the list of licences and authorisation depends on the type of textile manufactured and the pollutants released in the manufacturing process. The licences required by the industry include
Once the business plan has been carved out, the first step must be registering the business and giving it a legal identity. Registering one's business will benefit the project proponent to use various government policies. The documents required to get your business registered are
- Address Proof (Scanned copy of voter ID/passport/driving licence)
- Scanned copy of PAN card or passport
- copy of the bank statement (latest ), electricity or gas bill
- Scanned passport-sized photograph and specimen signature
- Proof of Registered Office Address
- Scanned copy of notarised rental agreement/ copy of sale deed/property deed
As Yarn and Textile processing involves effluent/emission generation that includes bleaching, dyeing, printing and colouring, this industry falls under the red category of industry in the list issued by the CPCB. The Pollution No objection certificate (NOC)is therefore issued to textile-producing units in two stages. The first is the Consent to Establish (CTE), which is given before the initiation of the setup of the facility. The other certificate, i.e. Consent for Operation (CTO), is issued after the site inspection of the establishment but before the unit starts to operate. The application is submitted through Online Consent and Authorisation Management System.
Documents for Consent NOC
The following documents must be uploaded while applying for Consent NOC to the portal of the concerned SPCB/ PCC or can be submitted via offline mode in some case.
- Duly filled Online Application
- Names of address proof of all directors and partners
- Layout Plan
- Schematic diagram of the business operation
- Details of Water consumption and Wastewater balance
- Land use classification
- Documents related to land ownership
- Project Report certificate from CA
- Consent fee
- Latest layout map of the factory.
- Process flow chart and detailed manufacturing process.
- List of plant & machinery installed by the unit.
- Monitoring reports for different emission or effluent sources
- Analysis report of the stack monitoring and noise level (if applicable)
Factory Licence: The factory owners in the country are required to register their premises with the local governing authority before the beginning of manufacturing operations. A factory’s Licence helps in risk management at the workplace by laying down the protocols for Safety and Health Management Systems in factory premises.
- Consent NOC (or proof )
- Rent/Lease Agreement copy with the owner.
- Final drawing copy of factory and layout copy.
- Declaration for the investment and Project profile by CA.
- Details of water supply (source, usage).
- Copy of SSI Registration Or IEM Registration.
- Process flow diagram.
- MOA Copy.
- List of Raw Materials with monthly or annual consumption.
- List of manufacturing Products with monthly or annual consumption.
- Details of the Generators or boilers.
- Details of the Stack and the chimney.
- Details of hazardous and non-hazardous waste, treatment and disposal.
- ETP/STP scheme, process and diagram.
Additional licences required by Textile Industry
- CGWA NOC for water Abstraction
- Services of TSDF operator/ HWM Authorisation
- Shop & Establishment act license
- ESIC Registration
- Trade License
- Trademark Registration
Market Overview of the Textile Industry in India
- The value of India's textile and apparel exports stood at 44.4 billion USD in FY22, a 41% YoY increase. Exports of readymade garments stood at 6.19 billion USD in FY22.
- The textile and apparel industry in the country is expected to grow at 10% CAGR to reach 190 billion USD by 2025-26. In fact, due to the high quality of fibre and machinery availability, we have a 4% share of the global trade in textiles and apparel.
- From April 2016 to March 2021, Japan, Mauritius, Italy, and Belgium were the highest contributors to FDI in the sector. At 44.4 billion USD, India scaled its highest ever exports tally in Textiles and Apparel, including Handicrafts, in FY 2021-22.
- The government allocated funds worth Rs. 17,822 crores (US$ 2.38 billion) between FY16-22 for the A-TUFS or 'Amended Technology Up-gradation Fund Scheme' to enable ease of doing business and give a boost to the Indian textile industry.
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