Incentive up to 3% of turnover, no subsidy for individual cos: Here's what PM-MITRA parks are offering

The Narendra Modi government on Friday announced sites for PM-MITRA (Pradhan Mantri Mega Integrated Textile Region and Apparel) across the 7 states of Uttar Pradesh, Madhya Pradesh, Gujarat, Maharashtra, Telangana, Karnataka and Tamil Nadu with an expectation of investment of Rs 70,000 crore and creation of over 20 lakh jobs in the textiles sector.

With an integrated textiles value chain, spanning from spinning, weaving, processing/dyeing and printing to garment manufacturing at one location in each park, the government aims to reduce logistics costs for the industry.

Addressing the media in Delhi, textiles minister Piyush Goyal said 7 out of 13 willing states were selected for PM-MITRA parks through a transparent competitive process, in line with Prime Minister Narendra Modi's vision to reduce losses and wastage in the currently fragmented textiles sector which blunted India's global competitiveness in exports.

The parks were validated through the PM Gati Shakti National Master Plan to assess the availability of raw material, labour, conducive local textile policy and connectivity; and will receive a centrally-sponsored cumulative investment of Rs 4,445 crore by 2026-27.

Centre and respective states will form SPVs (Special Purpose vehicles) in JV (joint-venture) mode to set up these parks, inspired by PM Modi's 5F vision of Farm to Fibre to Factory to Fashion to Foreign, and a master developer will be appointed.

The textiles ministry will provide financial support in the form of Development Capital Support of up to Rs 500 crore per park to the Park SPV, along with Competitive Incentive Support (CIS) of up to Rs 300 crore per park to incentivise speedy implementation.

The scheme will provide an incentive of up to 3 percent of the turnover to anchor investors for a few years on a first come first serve basis, only if they aren't benefiting from any other PLI scheme.

The minister explained that this move is aimed to attract the ecosystem for investment, and no specific incentive will be given for corporates or to procure equipment, unless it is meant for infrastructure.

Citing an example from Navsari near Surat where the evaluation of the proposal for a MITRA park revealed the presence of a local investment ecosystem and industry, he said the criteria to select the location included factors like cotton growing areas, availability of skilled labour, ample power and water and proximity to an investor ecosystem.

While he clarified that the PM-MITRA parks aren't export parks, but the economy of scale will help them in becoming more competitive.

The textiles ministry said the state governments have agreed to provide at least 1,000 acres of contiguous and encumbrance-free land along with a provision of a reliable power supply, water availability, waste-water disposal system, single window clearance and a stable industrial/textile policy, with plug & play facilities and R&D for the industry.