The textile sector in Tamil Nadu, which has production facilities across the textile value chain, is unlikely to attract major investment commitments at the Global Investors’ Meet to be held in Chennai next year.
Construction of individual units at the Cuddalore processing park might commence if the Government makes arrangements for water supply. Ten units will come up at the park at an investment of ₹1,000 crore. These units might sign MoU at the GIM, say industry sources. If the park is commissioned, it might encourage stitching units to set shop nearby, triggering more investments in future.
Lukewarm response
With regard to spinning mills signing agreements at GIM, just a couple of individual units have come forward so far, the sources say.
Raja Shanmugam, president of Tirupur Exporters’ Association, said that every year the Tirupur knitwear units invested approximately ₹1,000 crore towards minor expansion works. This year too that investment would come in. But, the GIM might not attract major investment in the garment sector because of the downward trend faced by the sector over the last couple of years. The Government should have made preparations to push for sectoral expansions. For instance, for textile processing units to expand, there should be adequate infrastructure, he said.
According to M. Senthil Kumar, Chairman and Managing Director of Palladam Hi-Tech Weaving Park, the Technology Upgradation Fund Scheme that provided subsidy to textile investments has slowed down. Subsidy available for powerloom units under the scheme has reduced. “So, major new investments at GIM from the powerloom sector is difficult.”
Incentives needed
Further, the State Government is yet to announce a textile policy. The Government should provide incentives for automation to encourage investments, he said. The job working powerloom units say the segment faces several challenges and, hence, is not expected to make major investments now.
