Textile sector sees huge FDI inflows
FDI inflows have trebled in the fiscal year 2016-17 as the sector managed to receive $619 million during this period.
The textile sector in the country has registered huge Foreign Direct Investment ( FDI) inflows, according to Investment India, an initiative of the Centre to attract FDI. In 2013-14, the textile sector registered $194 million FDI inflows that have trebled in the fiscal year 2016-17 as the sector managed to receive $ 619 million FDI inflows during this period.
“Textile, one of the oldest industries in the Indian economy dating back several centuries, is witnessing huge FDI inflows. Increasing FDI is a reason to cheer for the sector which currently contributes about 14% to industrial production, 4% to GDP, and 17% to the country’s export earnings, according to the Annual Report 2016-17 of the Ministry of Textiles. The industry accounts for nearly 12% share of the country’s total exports basket,” Nilanjani Roy of Investment India, told The Sunday Guardian.
“FDI of up to 100% is allowed in the textiles sector through the automatic route. The FDI cell at the Economic Division of the Ministry of Textiles has also helped in attracting FDI in the textile sector,” Roy said.
“Additionally, the govern- ment has taken various initiatives to promote the growth of the textiles industry in India. Some of these are Technology Up-gradation Fund Scheme (TUFS), the Scheme for Integrated Textile Park (SITP) and the Integrated Skill Development Scheme. TUFS is a flagship scheme of the Ministry of Textiles to leverage investments in technology upgradation in the textiles and jute Industry, with a special emphasis on balanced development across the value chain,” Roy added.
The Integrated Skill Development Scheme, promoted by Prime Minister Narendra Modi to address the need for trained manpower in the textile industry and related segments, has also contributed in a major way to the development of the sector. The huge FDI inflows in 2016-17 may surprise many, according to Roy.
Roy said that the growth in FDI inflows into the textile sector has also led to growth in job prospects in the country. Currently, the textile industry employs about 51 million people directly and 68 million people indirectly and this is expected to grow further, Roy added.
The Indian textiles industry is extremely varied, with hand-spun and hand-woven textiles at one end of the spectrum, and capital intensive sophisticated mills at the other end.
Some of the other initiatives taken by the Modi government to further promote the industry include introduction of a mega package for the powerloom sector, including social welfare schemes, insurance cover, cluster development, and upgradation of obsolete looms. The Ministry of Textiles has also signed a memorandum of understanding with over 20 e-commerce companies, aimed at providing a platform to artisans. The government has also announced a slew of labour-friendly reforms. National Aluminium Company Limited (NALCO) is a Navratna PSU and the country’s leading manufacturer and exporter of alumina and aluminium. Chemicals produced by the company include calcined alumina, alumina hydrate, while aluminium includes aluminium ingots, wire rods, billets, strips, rolled and other related products. Bauxite produced for captive consumption for production of alumina is included under the “chemicals” segment and power generated for captive consumption for production of aluminium is included under the aluminium segment. Aluminium is considered to be the “metal of the future” for India, considering its wide range of applications across various sectors. In addition to the electrical industry, which has been the predominant aluminium consuming sector in the country for a long time, substantial growth prospects are now