PM Mega Integrated Textiles and Apparel (PM Mitra) scheme
- Indian Textile Industry
Indian Textile has a rich history that dates back to ancient times, with India being known as the ‘golden bird’ due to the excellence of its textile exports. Today, the industry is an important contributor to the country’s economy, providing employment to millions of people and generating substantial foreign exchange earnings.
History and Evolution
India has been known for its textiles for over 5,000 years. The Indus Valley Civilization, which existed in the region over 4,000 years ago, produced cotton and silk fabrics that were highly valued in ancient trade routes. The Indian textile industry reached new heights during the Mughal era, with fine muslin, silk, and brocade fabrics being produced for the royal courts. The industry underwent significant changes during the British colonial period, with the establishment of mills and factories that produced fabrics on a large scale.
Post-independence, the Indian textile industry faced numerous challenges, including a lack of modernization, outdated technology, and competition from cheaper imports. However, with the implementation of government policies and reforms, the industry has been able to grow and expand in recent years.
Current Scenario
The Indian textile industry is divided into two segments: the organized and unorganized sectors. The organized sector consists of spinning, weaving, knitting, processing, and garment-making units, while the unorganized sector comprises small-scale handloom and powerloom units, as well as home-based and cottage industries.
The Industry is a major employer, providing direct and indirect employment to over 45 million people, making it the largest employer in the country after agriculture. It is also a significant contributor to the country’s GDP, accounting for 2% of the total GDP and 12% of the country’s export earnings.
The Industry is highly diversified, with a wide range of products that cater to both domestic and international markets. India is known for its high-quality cotton and silk fabrics, as well as its traditional handloom and handicraft products. The country is also a major exporter of ready-made garments, home textiles, and technical textiles.
Challenges and Opportunities
Despite its significant contributions to the economy, the Indian textile industry faces several challenges that hinder its growth and competitiveness. One of the major challenges is the lack of modernization and technological advancements in the sector. The industry also suffers from a lack of skilled manpower and low productivity levels. Furthermore, the industry has been affected by the COVID-19 pandemic, with disruptions in supply chains, reduced demand, and cash flow issues.
However, there are several opportunities for the industry to grow and overcome these challenges. The government has implemented various schemes and policies, such as the Technology Upgradation Fund Scheme and the National Handloom Development Program, to encourage modernization and innovation in the industry. The industry can also leverage emerging technologies such as 3D printing, AI, and blockchain to improve efficiency and productivity. There is also a growing demand for sustainable and eco-friendly textiles, which the industry can capitalize on by adopting sustainable practices and processes.
- PM Mitra Yojana
The Indian government’s PM Mega Integrated Textile Regions and Apparel (PM MITRA) scheme has been in the news lately as it aims to set up textile parks in several states across the country. The parks will be developed by a Special Purpose Vehicle (SPV) in a public-private partnership model, with each park having an incubation center, common processing house, common effluent treatment plant, and other textile-related facilities. The parks are expected to reduce logistics costs, generate employment, attract foreign direct investment (FDI), and improve the competitiveness of the textile sector in India.
With a contribution of more than 2% to the overall GDP and more than 12% to the manufacturing sector GDP, the textile industry is a crucial part of the Indian economy. The industry is India’s second-largest employer after agriculture and has a diversified value chain spanning from fibre to ready-made clothing. An estimated 45 million people are employed directly by it, and another 60 million are employed indirectly through related activities. With a 4% share of the global textile and clothing trade, India is the sixth-largest exporter of these goods worldwide. In FY22, India’s exports of textiles and apparel, including handicrafts, totaled USD 44.4 billion, a 41% rise year over year.
However, the industry has recently experienced a number of difficulties. The Index of Industrial manufacturing (IIP) for textiles shows a persistent fall in textile manufacturing. With India permitting the duty-free import of ready-made clothing from Bangladesh under the South Asian Free Trade Agreement (SAFTA) in 2006, textile imports have also increased significantly. The domestic sector has been further impacted by the rise in imports of clothing made with Chinese fabrics and yarns as a result.
Duties levied by importing nations have also hurt India’s textile exports. Duty-free access is granted to nations like Bangladesh, Sri Lanka, and Africa, which reduces the competitiveness of Indian textiles abroad. Currently, the textile industry’s Man-Made Fibre (MMF) value chain deals with an inverted duty structure, in which the tax on the output is lower than the tax on the inputs, causing an inverse buildup of input tax credit. Government money is lost as a result, and firms are prevented from moving essential operating cash.
The PM MITRA project seeks to establish textile parks throughout numerous Indian states in order to address these issues. The parks will lower logistics expenses and strengthen the textile industry’s value chain, increasing its competitiveness on a worldwide scale. About 20 lakh people can find work in these parks with an investment of Rs 70,000 crore, and the parks are essential to luring FDI. The cluster-based strategy will lower the sector’s rising logistical costs and wastage, enhancing the competitiveness of India’s textile industry.
In conclusion, the PM MITRA plan is a critical step in resolving the issues India’s textile industry is facing. The program’s emphasis on lowering logistical costs, creating jobs, luring FDI, and boosting competitiveness is anticipated to have a big influence on the industry. The project would cost a total of Rs 4,445 crore, even though the first funding In the 2023–24 Budget is only Rs 200 crore. The PM MITRA programme has the power to alter India’s textile industry and establish it as a leader on a global scale with the correct implementation and support.
