Mihir Parekh, Director – Mega Textile Park, Telangana State Industrial Infrastructure Corporation, Government of Telangana
The State of Telangana had announced its most aggressive textile and apparel policy. The Government now offers incentives under 4 major heads – capital assistance, operational assistance, infrastructure assistance and capacity building support. The Telangana Government has developed two major textile and apparel parks, one at the Kakatiya Mega Textile Park in Warangal, and the other is an Apparel Superhub in Sircilla. It has already attracted many global and domestic companies, including Welspun for the carpet project, Youngone of South Korea, Procter & Gamble, Pashupathi Group and Ginni Filaments, to name a few. In an interview to The Textile Magazine, Mr. Mihir Parekh, Director – Mega Textile Park, Telangana State Industrial Infrastructure Corporation, spoke in detail about the new textile policy.
Excerpts:
Can you give a brief of the new textile policy announced by Telangana?
Telangana was the first State in the country to come up with a truly modern textile policy in the last 3-4 years aimed at addressing some of the basic problems faced by the textile and apparel sector. The launch of the Telangana Textile and Apparel Policy (T-TAP) in August 2017 took the country by storm. Different other States with established textile clusters were taken by surprise that a relatively new State with very little presence in the textile and apparel sector could come up with such a forward looking and progressive textile policy. Since the launch of T-TAP, other States have come up with revised textile policies which have replicated certain clauses and concepts from T-TAP word for word.
The objective of T-TAP is to create a thriving textile and apparel eco-system in Telangana which today is the third largest producer of cotton in India and turns out more than 60 lakh bales of cotton per annum. The long staple cotton fibre of Telangana is considered to be among the best in the country and is routinely exported to other States like Tamil Nadu, Gujarat and Maharashtra. As of today, due to lack of downstream industry, we are able to utilize only 20% of the cotton produced in the State and the rest is exported as raw cotton.
On the labour front, lakhs of skilled workers from Telangana are currently working in textile clusters of Surat, Bhiwandi and Solapur, due to the traditional lack of downstream industry in the State, and are keen to return to Telangana to put their acquired skills for the development of their State.
The overall aim is to make Telangana a thriving textile and apparel hub for the entire value chain.
What are the key incentives offered by the Telangana Government?
The State Government offers incentives under four major heads – capital assistance, operational assistance, infrastructure assistance and capacity building support. We put projects based on the investment or employment potential into five categories from A1 (less than Rs. 1 crore investment or employment of less than 10 persons) to A5 (more than Rs. 200 crores investment or more than 1,000 persons employed. All our graded incentives are based on the project category with higher category projects receiving higher incentives.
On the capital side, we provide capital subsidy of up to Rs. 40 crores and additional Rs. 10 crores capital subsidy on ETP development.
On the operational side, we provide up to 8% interest subsidy for 8 years, Rs. 1 – 2.5 per unit power subsidy for 5 years, 100% SGST reimbursement for 7 years, transport subsidy by way freight reimbursement and O&M subsidy for CETP / ETP for a period of five years.
On the infrastructure side, we provide quality infrastructure – roads, water, power, etc. – at the company’s doorstep. Land is offered at attractive subsidized rates to anchor investors / first movers.
On the capacity building side, we provide skilled manpower as per the requirement at no cost to the company. We also provide Rs. 3,000-5000 per person as training subsidy to assist the company with skilling manpower on its own. We also subsidize setting up of training institutes / skill development centres by the private sector.
Why should a company consider Telangana for investment?
While incentives are just one component of the decision-making process when a company is evaluating locations for investment, the comprehensive package of land, factor conditions, infrastructure, approval and facilitation mechanism, incentives and industry eco-system that are available / being created in Telangana make it a unique destination for investments in the textile and apparel sector.
To start with, Telangana today has the largest land bank available with the Government earmarked for industrial use. Any company looking for land ranging from one acre to 1,000 acres can readily be accommodated with multiple options for ready land parcels in Telangana. This takes out the time-consuming and uncertain step of land acquisition from the investment process.
Add to this factor conditions of abundant raw material availability, skilled manpower, central location for the purpose of serving a large market in the South and Central India, and you can see why Telangana is emerging as a preferred destination for leading players.
When the above facilities are accompanied by quality infrastructure – roads, water, uninterrupted quality 24X7 power supply (the State is already power surplus and leading in renewable power generation), a time-bound and transparent approval facilitation system under TS-iPass and the facility of being housed in a thriving textile and apparel ecosystem, the case for investing in Telangana becomes extremely compelling.
Can you name the textile parks that are coming up in the State?
Two of the flagship initiatives of the Government are development of the Kakatiya Mega Textile Park in Warangal and the Apparel Superhub in Sircilla.
The Kakatiya Mega Textile Park, when once operational, will be the largest integrated textile park in the country. It will be spread over 1,200 acres in the first phase. it has special features like built-to-suit factories for easy starting of units, 21 MLD common effluent treatment plant (CETPs) with zero liquid discharge (ZLD), customizable master plan to suit individual requirement, world-class infrastructure at the doorstep (roads, water, power, sewerage system, etc.), common facilities like workers’ dormitories, warehouses, testing and QC labs, expo centre, etc., and a dedicated technical training centre within the park. It will house all units in the value chain, including spinning, weaving, processing, garmenting & apparel, technical textiles, etc. One lakh people are expected to work in the park once it is fully operational.
The State Government has initiated works related to development of a new apparel super hub coming up over 60 acres of land and a group weaving project over 88 acres of land at Peddur village in Sircilla with the following objectives of strengthening the Sircilla powerloom industry, diversifying the skill base of women for alternate livelihood, and for upgrading the workers to become owners of looms and earn a sustainable income.
The project envisages offer a employment opportunities for 20,000 women in and around Sircilla. In addition, there are a number of other smaller textile / apparel parks which are being revived by the Government.
Within the textile manufacturing chain, which are the segments you are targeting?
Our policy is therefore neutral to all value chain components, including cotton and man-made fibres. We are therefore targeting spinning, weaving, processing, garmenting & apparel, technical textiles as well as textile machinery manufacturing.
Which are the major textile companies that have evinced interest in investing and setting up plant in Telangana?
We have received very encouraging response from the textile and apparel industry. Some of the major textile companies that have not only evinced interest but are well on their way to investing heavily in Telangana include Welspun Group (approximately Rs. 2,000-crore investment), Youngone Corporation (a South Korean company which is a leader in export of sportswear, investing approximately Rs. 900 – 1,000 crores), Procter & Gamble (investing Rs. 1,000 crores with a sanitary pads and baby diapers unit), Pashupati Group (investing Rs. 200 crores in PET bottle recycling unit) and Ginni Filaments (investing Rs. 200 crores) among others.
Some of the leading Telangana-based spinning units which are going for expansion include Suryalata Spinning Mills (investing approximately Rs. 150 crores), and Sitaram Spinning Mills (investing Rs. 200 crores), among others. In addition, there are a number of companies setting up units all across the State in order to benefit from the attractive set of incentives under T-TAP and participate in the State’s growth.
Welspun has made a formal announcement on setting up its carpet and flooring plant in Telangana. Your views on this project and how this would benefit the State?
When Welspun came to explore Telangana as a potential investment destination after the launch of our textile policy, it had a much smaller project in mind. However, when it evaluated the ease of doing business and proactive Government support to the industry in Telangana, they went back to the drawing board and decided to invest much more. We take this with a lot of pride and as a validation of the policy of being truly investment and business friendly of our Chief Minister, Mr. K. Chandrashekhar Rao.
The carpet and flooring plant will be the first of its kind in India and will be largely used for import substitution. Today, India imports all of its wall-to-wall carpet flooring tiles. Once this plant becomes operational, it will help reduce imports and, going ahead, the company also intends to export its products. This will definitely put Telangana on the world map in home textiles.
How do you expect the textile policy to benefit the State in terms of investments, employment generation and overall growth?
As part of the Industrial Policy framework of Telangana, Textiles and Apparel was identified as one of the 14 thrust areas with a mandate to develop its own sector specific policy. T-TAP is intended to have a greater Government focus on this crucial sector. We expect to create five new textile / apparel parks under the policy employing three lakh people, of which 60% would be women. Our aim is to get at least 50 new investments in the textile and apparel sector in Telangana and be able to export at least 20% of production.
Are you also planning to invite any investments from overseas companies which are looking at India for textile manufacturing?
We are in the process of becoming home to one of the largest Korean companies in sportswear export business Youngone Corporation. Youngone will be the anchor investor in the Kakatiya Mega Textile Park and will be setting up six production units in garmenting, knitting and technical textiles. IKEA recently inaugurated its first store in India in Hyderabad on account of the ease of doing business and proactive support extended by Telangana. We are also in discussion with some of the other overseas companies, but these are at very early stages. We are hopeful that in the coming years a number of overseas companies will look to Telangana as their operating base in India.
The textile industry is highly labour intensive. Are you setting up any skill development institute or training centers to train the unskilled manpower so that they will be available for the textile companies which are setting up unit in the State?
The Government has signed an MoU with the PSG Institute of Coimbatore for setting up a training and skill development centre at the Kakatiya Mega Textile Park in Warangal. We have also tied up with Kay Ventures for skilling workforce in the garmenting sector in Sircilla and operate on job work basis for major clients such as Arvind Ltd. and Page Industries.
It is the Government’s promise to provide skilled workforce to the textile and apparel industry as per its requirements. We also provide a one-time training subsidy of Rs. 3,000-5,000 per person to the investing companies under the textile policy to meet their training requirements.
Other important aspects to be considered in the textile industry are environment pollution and effluent discharge and the treatment norms and solutions. Is the Government planning to set up common infrastructure which will encourage companies to set up their manufacturing facility?
At the Kakatiya Mega Textile Park, the State Government is setting up a 21 MLD common effluent treatment plant with zero liquid discharge (ZLD) system. This will allow companies investing in the park to focus on their core operations and need not set up individual ETPs. The CETP will be operated by a private player and will be available on a pay per use basis for all industries within the park.
For companies investing outside the park, the Government is providing capital and operating subsidies for setting up their own ETPs. The Government is also providing capital subsidy of upto Rs. 10 crores and operating subsidy for a period of five years to encourage setting up ETPs by the new and existing units.
When do you expect the first few companies to start commercial production and what is the target for making Telangana a major hub for textile manufacturing?
We expect the first set of companies to start commercial production in the first quarter of 2019. Some of them could start as early as April 2019. It may be noted that major expansions of the existing spinning mills have already become operational in the last couple of months. Expansion by Suryalata Spinning Mills and new baby diaper unit by Procter & Gamble are already operational.