BANGALORE, India — The Indian government, encouraged by the success of a seven-year program to modernize and upgrade the country's vital textile sector, has extended it for another five years.
Under the program, called the Technology Upgrade Fund Scheme, which kicked off in April 1999, the central government offers an interest subsidy of 5 percent to textile companies when they take loans to upgrade specified machinery in their factories. The government has identified several financial institutions to give loans to these textile factories. The program also includes capital subsidy for buying state-of-the-art machinery.
"The TUFS has surely been successful," said D.K. Nair, secretary general of the Confederation of Indian Textile Industry. "It is one of the most successful schemes of the government, as the benefit goes directly to the targeted group. The offtake of loans has increased in recent years."
A. Sakthivel, president of the Tirupur Exporters' Association, estimated that at least 500 factories in Tirupur, including his own, have taken TUFS loans. Tirupur is a major center for knitwear manufacturing and exports in south India.
The Indian government drafted the scheme to modernize the textile sector because it is the second largest provider of employment after agriculture. Textiles also contribute 14 percent to India's industrial production and 17 percent to export earnings.
According to data published by the Office of the Textile Commissioner, about 11,200 applications for loans totaling 369.5 billion rupees, or about $9.2 billion at current exchange, were approved during the seven years ended March 2007. The program initially received lukewarm response, but picked up significantly once the abolition of global textile quotas in 2005 neared.
The Indian textile industry, which ranges from simple hand looms in the small business sector to large composite mills, has been characterized by technological obsolescence due to the protected quota market it enjoyed for many years. Every segment of the industry is now taking loans under TUFS. However, the spinning and composite mills have been the largest beneficiaries of the program, followed by processing, weaving, apparel, synthetic fibers and knits.
According to Crisil Ltd., a Standard and Poor's company involved in rating and research, the well-developed spinning sector has been the biggest beneficiary. Figures show that the spinning sector has taken 33 percent of the loans, while the weaker processing and weaving sectors have received just 11 and 7 percent, respectively.Crisil said investments in weaving and processing segments were grossly inadequate due to small unit sizes, poor capital productivity and profitability of units. Crisil believed that there was a need to not only correct the investment bias toward spinning, but also to channel larger flows into weaving and processing.
Nair explained that apparel manufacturing in India is labor-intensive, while spinning is the most capital-intensive and needs more funds. Many of the spinning mills are big companies listed on the stock exchanges. In the case of processing and weaving, more than 60 percent of the units are small businesses, and many of them may not even have bank accounts and would be unable to produce a balance sheet for taking loans.
Sakthivel said apparel factories have lower capital costs, and therefore it is understandable that total loans taken by them are much less than spinning and composite mills.
In an attempt to correct the bias, the government modified the program in December, lowering the interest subsidy to 4 percent for spinning machinery, while retaining the 5 percent subsidy for all other segments. It also extended 10 percent capital subsidy to apparel and technical textile segments. The TUFS program will enable an investment of 1.5 trillion rupees, or $37.12 billion, in the textile industry in the next five years, an official statement said.
In the national budget for fiscal 2009, the central government allocated 10.9 billion rupees, or $268.6 million, for TUFS. P.D. Patodia, chairman of the Confederation of Indian Textile Industry, said this was not enough and demanded it be increased.
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)