# Textile Parks PPP: Podcast EP 46 #TextileParks #PMMITRA #PPP #TextileIndustry #MakeInIndia

https://www.youtube.com/watch?v=SBShqR7d2LQ

[00:00] [music]
[00:13] Namaste.
[00:14] Namaste.
[00:15] Namaskar and a very warm welcome to all our viewers and listeners.
[00:20] I am Deepika Upadhyay and your host for today's insightful discussion.
[00:25] Today we delve into a sector that has been a backbone of India's manufacturing strength and export potential.
[00:33] The textile industry and more specifically the evolution of textile parks under public-private partnership models including the transformative PM Mitra initiative.
[00:47] Over the years, India has made significant strides building integrated textile ecosystem but questions remain around performance, scalability, sustainability and global competitiveness.
[00:58] To guide us through
[01:00] These critical insights, we are honored to have Dr. Naresh Bana, PPP advisor and a strategic thinker with deep expertise in policy, infrastructure and economic development.
[01:16] Dr. Bana, it is always a privilege to have you with us.
[01:18] Thank you.
[01:19] Dr. Bana, what has been the overall impact of textile parks set up under SITP and PM Mitra in the last 15 years of investment, employment and exports?
[01:34] Thank you, Deepika ji.
[01:36] Before I answer your question, let me give you a little history about the textile industry of India.
[01:44] India is uniquely placed to boast about more than 5,000 years old textile story.
[01:53] Cotton was grown even in the Indus Valley.
[01:57] And long before many countries of the world began more.
[02:02] Organized textile production, we had textile industry here.
[02:07] Indian muslin from Bengal, silk from Banaras, Kanchipuram, Chanderi, Pashmina, Khadi, and numerous handloom traditions have earned worldwide recognition today.
[02:23] And during the colonial period, India's textile manufacturing was made to decline as British wanted to promote their own industry.
[02:37] And that displaced and destroyed a lot of talent and industry in India.
[02:43] But after independence, India has rebuilt its textile industry through public mills, cooperatives, and later private investment.
[02:53] Liberalization of the 1991 has accelerated the modernization.
[03:01] Recognizing that fragmented production.
[03:04] was reducing competitiveness,
[03:06] the governments over a period of time have introduced a schemes for integrated textile parks, that is SITP, in 2005,
[03:17] which was followed by today's Prime Minister mega integrated textile region and apparel initiative.
[03:25] That's PM Mitra, which you mentioned.
[03:28] The aim is to build world-class integrated manufacturing ecosystem capable of competing with the best textile clusters globally, where you can provide plug-and-play options to the entrepreneurs and the uh specialist people.
[03:46] The objective is simple.
[03:49] Move from fragmented manufacturing to globally competitive integrated value chains.
[03:57] And the result have been encouraging.
[04:01] Though they are mixed.
[04:04] Because under SITP more than 90 textile parks were sanctioned.
[04:10] Most are operational or substantially completed.
[04:14] While some have experienced delays, restructuring, or limited success due to land, financing, or local governance, or even the business governance issues.
[04:28] These parks, whichever in whatever state they are, they attracted investments exceeding 25,000 crores, which is in today's term is more than uh 2 and 1/2 billion dollars.
[04:42] They have generated employment, which is estimated to be more than 200,000 direct jobs, with many more indirect jobs, and strengthened textile manufacturing clusters across several states.
[04:58] So, PM Mitra is more refined, more evolutionary, and represents the next generation.
[05:06] And now seven mega parks are being developed in strategically selected states with an estimated investment potential of exceeding 7 billion dollars, that is 70,000 crores, and employment generation of around 20 lakhs, including direct and indirect jobs.
[05:26] The vision is much larger than the industrial estates.
[05:31] These parks integrate entire value chain right from spinning, weaving, processing, garment manufacturing, logistics, testing, warehousing, marketing, skill development, and worker housing within one ecosystem.
[05:48] The expected outcome is lower logistic costs, reduced production time, and higher export competitiveness.
[05:57] Sir, that clearly highlights how these parks have shaped India's textile growth trajectory over the years.
[06:06] Sir, coming on to how many have failed
[06:08] Out of the total such parks funded, partly funded by government?
[06:13] Which is the most shining good example of successful textile park in India?
[06:19] Okay.
[06:20] The question is valid that now that first scheme SITP was launched 2005, so what is the status as to?
[06:31] But it would be incorrect to say that many parks as complete failures.
[06:36] Out of roughly 90 sanctioned SITP parks, around 10 to 15 projects have either remained substantially incomplete, or they have struggled to attract adequate investment, or have underperformed due to financial, governance, or infrastructure issues.
[06:58] Now, there are many who are functioning below their intended capacity, rather than being outright failures.
[07:07] And let me tell you, the most successful
[07:09] Example is the Palladam Hi-Tech Weaving Park in Tamil Nadu.
[07:15] This park has uh actually provided a fillip and a whole lot of value has been created in the Tiruppur uh textile zone.
[07:27] And uh it has successfully brought together hundreds of textile entrepreneurs, developed common infrastructure, improved productivity, and strengthened, as I said, the Coimbatore Tiruppur uh textile ecosystem.
[07:42] Other strong performers include textile parks in Gujarat, even in uh, Thane, that have benefited from existing industrial ecosystem and strong state support.
[07:56] The key lesson is clear, that the infrastructure alone will not guarantee success.
[08:00] Success has to come from the entrepreneurs, from the value creation by people, the machines they deploy, the people
[08:10] They engage, the skills which are at play, and obviously, the location, market access, entrepreneurial ecosystem, everything plays a role, including the governance and continuous park management.
[08:28] Well, sir, understanding both the gaps and success stories gives us a balanced perspective on policy outcomes.
[08:37] Moving ahead, sir, which public-private partnership models have worked best in existing textile parks?
[08:46] And what are the key challenges in land acquisition, infrastructure, and operations?
[08:53] Very nice question.
[08:55] Uh, Deepika ji, the most successful model has been the special purpose vehicle-based approach.
[09:02] In this model, the local textile entrepreneurs jointly establish a SPV, which develops and manages the park.
[09:12] With government assistance and private investment.
[09:16] And that creates ownership among those textile entrepreneurs.
[09:21] The government provides capital grant, while private stakeholders invest in land, building, and factories.
[09:29] However, there are several challenges.
[09:32] And among them, the land acquisition remains difficult in many areas.
[09:37] In fact, that becomes the most critical challenge anywhere in India today.
[09:43] And then there is infrastructure requirements such as roads, power supply, water, which often are dependent upon the local bodies or the local government, which often get delayed.
[09:58] So, there are challenges.
[10:00] And then there is environment approvals, particularly for dying and processing units which create polluted outflow.
[10:08] And then these things require sufficient time for not only for
[10:14] Taking the approvals, but also to set up the treatment plants.
[10:18] Then banks have been sometimes cautious in financing SPVs with limited operating history.
[10:28] So, unless you have the off-take, the off-take in terms of people who would be setting up their industry, and who would be who are new entrepreneurs, which may give less confidence to banks.
[10:41] Whereas if there are established entrepreneurs who wish to join that SPV, that will give more confidence to banks and they will lend out better.
[10:47] So, long-term park management, the bankability of the park, and the completion time all matters.
[10:56] So, and ultimately the textile park requires a professional asset manager.
[11:02] Because people who set up the shop there or business there, they need right kind of sustainability.
[11:10] The bijli pani.
[11:11] So, that's very important.
[11:14] Thank you for breaking down that so effectively, sir.
[11:18] Public private partnership models truly seem to be the backbone and scalable textile infrastructure.
[11:25] Moving ahead, sir, how are the new PM Mitra parks different from earlier SITP parks in terms of scale, funding, plug-and-play facilities, and global competitiveness?
[11:40] Like always, a new scheme certainly has taken care of the earlier drawbacks.
[11:47] So, PM Mitra is a significant evolution.
[11:51] In earlier scheme, the parks generally focused on providing common infrastructure for textile manufacturers.
[11:58] In the current PM Mitra, it develops complete integrated textile cities.
[12:04] Each park may cover around 1,000 acres or more.
[12:08] It combines industrial production, logistics, worker housing also has been catered for.
[12:16] So that their travel time is reduced.
[12:18] And commercial services, skill centers, testing facilities, laboratories, social infrastructure, marketing facilities, conferencing facilities, I mean, whatever is needed for a particular entrepreneur in the entire life cycle of the textile is provided at one place.
[12:43] So, the government support is there in a big way.
[12:49] There is substantial central support alongside state participation.
[12:52] And aim is to create plug-and-play industrial sheds, and they could be multi-story uh facilities to give them a very smooth induction and quick facility to start production.
[13:12] And then there is digital infrastructure, internal logistics, multimodal.
[13:16] Connectivity, and sustainability are incorporated from design stage itself.
[13:22] The objective is to create globally competitive manufacturing, and which is comparable to leading textile parks of China and Vietnam and Bangladesh which are some of the competitors.
[13:36] That's a valuable distinction, Dr. Bana.
[13:38] PM Mitra certainly appears to be significant leap forward from earlier frameworks.
[13:45] So, what role do the state government and private developers play in the success or failure of these public-private partnership textile parks?
[13:56] See, the state government's role is decisive.
[13:59] Because the land cannot be obtained without the support of state government.
[14:05] And the central government provides viability gap funding, policy direction, and financial support not only to the park, but also for their
[14:17] Connectivity to the ports and other dry ports.
[14:21] The state governments, as I said, uh in addition to land, they provide external infrastructure, which is the connectivity of power lines, the road connectivity, the other facilities which are required, whether it is in terms of hospitals or any other thing which are required for people who work there, for the machines which are there, or the entire enterprise which is going to be set up there.
[14:49] So, the private developers on their part, they ensure setting up of the SPV, correct running of the special purpose company, and asset management, the estate management, and they coordinate with the state government very actively and with various departments, and with right kind of coordination only, you can resolve the bottlenecks and ensure the parks perform much better.
[15:17] In fact, some of our textile parks like
[15:19] The one in Thane which I have also visited.
[15:21] They stand out as something to be learned from.
[15:24] How multi-story and other facilities are being run like one single industry and there are very little complaints in terms of provisioning of administrative services, security, and other sustainability items.
[15:50] So, the PPP succeeds when all our stakeholders, they join hands and with a right objective that yes, this industrial facility, this textile park has to perform as one unit and produce much better economic economy activity at much competitive rates.
[16:09] So, that's how things are being planned and also some of them are executing that way.
[16:14] Absolutely, Dr. Bana.
[16:16] The synergy between the state governments and private players seems critical to
[16:20] Long-term success.
[16:23] So, how are sustainability, water, ETP, and energy requirements being addressed in the new generation of textile parks?
[16:36] See, uh, as we have become more environmentally conscious and there are compliances also, we have uh regulations at central level, there is a national green tribunal, and there are many other compliances which are applicable because textile industry is also one of the polluting industry.
[16:57] So, uh, sustainability uh becomes central to textile competitiveness.
[17:03] You got everything you add, whether it is for uh treatment of the effluent, it adds to the cost.
[17:11] So, the global buyers which are looking for competitive prices, they are also asking for the right kind of process which has been used.
[17:22] In manufacturing those textiles.
[17:24] Right?
[17:24] So, they, the current, the modern parks are including common effluent treatment plants.
[17:34] So, the entire textile park will have one effluent treatment park which can bring down the cost of setting up individual treatment plants.
[17:40] And then there is an emphasis on having zero liquid discharge systems wherever it's possible.
[17:48] Then recycling of water, rain water harvesting.
[17:53] So, all these are sustainable practices.
[17:55] Then renewable energy including rooftop solar, the buildings which are using less and less energy or green buildings as we say.
[18:07] Then the waste management systems, waste management culture.
[18:11] Where to reduce waste at each and every process, each and every step.
[18:15] And then digital environment monitoring, digital security, and common environmental infrastructure.
[18:22] Significantly reduces costs for especially the small players, the MSMEs, the nano level industry or the individual based sub-economic activity all are supported.
[18:38] So, this shared infrastructure is one of the it's like a city which is the strongest justification for setting up this as one single entity.
[18:51] Thank you for sharing light on that sir.
[18:53] Sustainability clearly is no longer optional but integral to modern textile parks.
[19:00] So, what incentives and policy supports are needed to attract anchor tenants and MSMEs to these parks and ensure full utilization?
[19:11] Most of these policies are already in place.
[19:15] At times, the attitude of a person uh implementing that policy uh becomes a little difficult.
[19:21] But I uh
[19:26] By and large, things are in place.
[19:29] But as I said, infrastructure loan is not sufficient.
[19:33] And initially, when you want to bring anchor investors, they require policy clarity and policy support.
[19:41] So, you should not only have policy in place, but you should have your officials who can articulate that policy, who can sustain that policy, who can walk the talk, who can provide real single window uh to the entrepreneurs.
[19:56] And uh when it comes to the pricing, there have been cases where uh the land use uh before it was changed and the land has changed hand.
[20:07] That means the the land cost for the entrepreneurs may have all gone up, which could be stopped.
[20:13] And then, there could be long-term lease options, reliable power supply and water supply, the support in terms of interest uh uh on the financing interest.
[20:25] So, uh that can also be from the government.
[20:26] side. And then, technology upgradation
[20:29] assistance, export facilitation,
[20:32] having a dry port kind of facility at
[20:35] the industrial park or textile park is
[20:37] going to be very helpful. There could be
[20:40] skill development centers integrated.
[20:42] And as I said, testing laboratories are
[20:44] going to be there. The design support,
[20:46] marketing support, and these are the
[20:49] things which MSMEs need.
[20:51] Because they themselves are unable to
[20:52] spare capacity and resources for such
[20:55] things. So,
[20:56] uh anchor invest investors and anchor
[20:59] entrepreneurs certainly are needed, but
[21:01] MSMEs are the ones who will bring in the
[21:03] scale and the numbers and support the
[21:06] entire industry uh textile
[21:08] Very well put, sir. Creating the right
[21:10] policy ecosystem will
[21:13] will be the key to driving participation
[21:15] the max and maximizing these parks
[21:18] potential.
[21:19] Looking ahead, sir, how does India's
[21:21] textile parks under public private
[21:24] partnership help us capture the dollar
[21:26] 100 billion export target and compete
[21:30] with Bangladesh and Vietnam?
[21:33] Deepika ji,
[21:35] uh
[21:36] it is not a difficult target.
[21:39] India possesses
[21:40] very high
[21:43] quantity of
[21:44] all the ingredients
[21:46] which are required for global
[21:48] leadership.
[21:51] The quantity and quality both.
[21:54] We produce cotton.
[21:56] We have synthetic fiber capability.
[21:59] We have technical textile expertise of
[22:02] ages.
[22:04] We possess a large skilled workforce.
[22:07] We have a rapidly growing domestic
[22:09] market.
[22:10] You would be happy to note that one of
[22:13] my
[22:14] friend,
[22:15] he has set up a
[22:16] uh
[22:18] textile manufacturing facility in state
[22:20] of Bihar, where they're producing
[22:22] 300,000 pieces of uh
[22:26] apparel
[22:27] per day. And it's all
[22:29] uh using the solar energy from a captive
[22:32] solar park.
[22:33] So,
[22:35] uh we have a
[22:36] uh
[22:37] a whole lot of entrepreneurship among
[22:39] us. And the only missing element appears
[22:42] to be
[22:43] that integrated manufacturing
[22:45] ecosystems. So, if we create these
[22:47] textile parks,
[22:49] these can bridge the gap.
[22:50] And if properly managed,
[22:53] they reduce logistic costs,
[22:55] improve productivity,
[22:57] strengthen supply chains, accelerate
[23:00] exports, and attract foreign investment.
[23:04] Now, competing with Bangladesh and
[23:06] Vietnam,
[23:07] uh certainly it is going on. It's an
[23:09] ongoing process. And uh we have to
[23:12] continue reducing our
[23:14] uh
[23:15] production costs, our other overheads,
[23:18] and without compromising on quality.
[23:21] And uh we can also look at some of our
[23:23] compliances costs, which are also
[23:27] uh an impediment to how those could be
[23:28] reduced or smoothened.
[23:30] So, these parks actually can be a
[23:34] uh significant step towards this uh
[23:38] increasing competitiveness of our
[23:40] uh
[23:41] uh textile output.
[23:43] So, if the implementation remains timely
[23:46] and professionally managed,
[23:49] textile parks can really become powerful
[23:51] export engines,
[23:53] which can contribute significantly
[23:54] towards India's
[23:57] ambition of achieving approximately or
[23:59] if even more than 100 billion dollars in
[24:02] textile and apparel exports.
[24:05] The opportunity in fact is enormous.
[24:07] And
[24:08] the challenge now is the flawless
[24:10] execution.
[24:12] In fact, if you remember, in our last
[24:13] podcast, we talked about the in- inland
[24:16] water transport. Inland water transport
[24:18] is one of the means to reduce our
[24:20] transported cost for export.
[24:22] Yes.
[24:22] Yes.
[24:23] Very rightly said, sir. Thank you so
[24:25] much, Dr. Bana, for sharing such
[24:26] insightful, forward-looking perspective.
[24:29] To all our viewers, thank you for
[24:31] joining us for this encouraging
[24:32] discussion. We hope this conversation
[24:34] offered valuable insights into one of
[24:37] India's most dynamic sectors. Until next
[24:39] time, this is Deepika Upadhyay signing
[24:42] off. Namaste.
[24:43] Namaste.