NEW DELHI — India expects its Textile Parks Projects to generate half a million jobs and increase the country’s capacity for textile exports, but the endeavor, launched in 2005 and worth more than $4.5 billion, has been evolving slowly.
There are only three parks in operation — the Brandix India Apparel City Park and the Pochampally Handloom Park in Andhra Pradesh, and the Gujarat Eco-Textile Park in Gujarat. Now the central government aims to speed up the opening of the parks. One, the Palladium Hi-Tech Weaving Park, was unveiled in December in Tamil Nadu and at least three more are expected to be up and running by March. The government aims to have 40 in operation by the end of next year.
“The textile park is a plan to create a world-class industrial estate with common infrastructure facilities for textile units spanning the entire range of activity, from cotton ginning to textiles, garments and ancillary units,” said Dayanidhi Maran, minister for textiles.
The parks are meant to include and cover end-to-end processes from spinning, weaving and garment processing to hosiery, embroidery and jet looms. When the 40 planned parks are fully operational, each is expected to result in production worth about $8.5 million a year.
While there are only four parks operating now, the target is to have a majority of the 40 planned ones up and running in the next year. The government will then evaluate the further demand and unveil plans for additional parks early in 2012.
“The slowdown has been a result of many factors,” said a principal from Technopak, a consulting firm that is the primary partner for two parks in Maharashtra, who requested anonymity. “These include various approvals, including pollution control and environmental norms, and the recession. But the interest in textile parks has only been increasing and the concept is a sound one.”
The park in Tamil Nadu has placed the spotlight on the market in southern India, where Maran said eight textile parks, being set up at a cost of $469.8 million, are expected to generate export revenues worth $827.8 million.
“The eight textile parks which will open in Tamil Nadu represent 20 percent of the total 40 integrated textile parks…proposed to be established across the country,” the textile minister said. “These will create job opportunities for 80,000 people.”
He said different states in India are making their own investments, and the parks are set up based on the specialized raw materials in each state and its needs.
In November, the textile ministry revealed its decision to set the minimum size of textile parks at 100 acres to achieve economies of scale. The central government provides 40 percent of the project cost up to a maximum of $8.9 million, mainly through long-term loans. The remaining funds for the projects come from a variety of loans and investments, with another 40 percent in loans from financial institutions and the remaining 20 percent from the small and medium-size enterprises wanting to establish factories in the park.
Exports have been a major focus for the textile industry, with government officials estimating that the U.S. and European Union account for about two-thirds of India’s textile exports. The other major export destinations are Canada and the United Arab Emirates. According to Foreign Trade Statistics of India, total textile exports for the three months through June — the most recent data available — were $5.6 billion, up from $4.8 billion for the same period in 2009. Textiles accounted for 10.7 percent of the country’s total exports.
According to a survey carried out by the Indian Labor Bureau, the textile sector generated 150,000 jobs between June 2009 and June 2010, the second largest of any sector in the country.
While some critics of the textile parks projects contend certain states such as Maharashtra and Gujarat have been getting more encouragement from the government, the development of the parks also is being determined by the interest taken by local governments. Sheikh Abdullah, minister for renewable energy, told WWD that Kashmir, for example, understands the importance of the parks for growth and has been taking steps to open them.
Two textile parks were allotted to that state, which is known for its pashminas as well as embroidery and wool.
“The success of different textile parks has varied depending on location and ability,” said Avinash Mayekar, managing director and chief executive officer of consulting firm Magus. “The one in Surat, for example, has had a successful launch.”
Each park has been planned to contain about 50 plants and to provide up-to-date infrastructure to the industry in order to meet international environmental and social standards. But the ownership structure of the parks varies from state to state. For example, two new parks to be inaugurated before March in Maharashtra, in the cities of Peth Naka and Latur, are being developed as a cooperative run by the companies involved, said S.N. Todi, commercial adviser for Bombay Rayon Fashions Ltd.
“Both these textile projects will target garment exports across global markets,” Todi said.