Project Profile: Integrated Textile Park at Tilda, Raipur (Chhattisgarh)

Introduction

India is the one of the world's largest producers of textiles and garments. Abundant availability of raw
materials such as cotton, wool, silk and jute as well as skilled workforce have made the country a
sourcing hub. It is the world's second largest producer of textiles and garments. The Indian textiles
industry accounts for about 24 per cent of the world's spindle capacity and eight per cent of global
rotor capacity.
Value Chain:
Global Value chain for textile industry is as follows:
Figure 1: Global Textile Industry Value Chain

Textile and apparel value chain is affected by purchasers; creating finished products must go through
many stages and production activities are often carried out in many countries. In particular, wellknown manufacturers, big wholesalers and retailers play key roles in establishing production networks
and shaping mass consumption through a series of strong brands and outsourcing activities to satisfy
this demand. Global textile and apparel value chain is divided into 5 basic stages: 1) Supply of raw
materials, including natural cotton, thread, etc; 2) Production of intermediate goods; products of this
stage are fibers, fabrics provided by weaving, knitting and dyeing companies; 3) Design and
manufacture finished products implemented by garment companies; 4) Export by commercial
intermediaries; 5) Marketing and distribution
Supply chain of Indian Apparel market
Cotton textiles continue to form the predominant base of the Indian textile industry, though other types
of fabric have gained share in recent years. In 1995-96, the share of cotton and manmade fabric was
60% and 27% respectively. Cotton fabrics accounted for 46% of the total fabric produced in 2005-06,
while man-made fibres held a share of 41%.

Figure 2: Indian Apparel market supply chain

The fibre and yarn-specific configuration of the textile industry includes almost all types of textile
fibres, encompassing natural fibres such as cotton, jute, silk and wool; synthetic / man-made fibres
such as polyester, viscose, nylon, acrylic and polypropylene (PP) as well as multiple blends of such
fibres and filament yarns such as partially oriented yarn (POY). The type of yarn used is dictated by
the end product being manufactured.
The Man-made textile industry comprises fibre and filament yarn manufacturing units of cellulosic and
non-cellulosic origin. The cellulosic fibre/yarn industry is under the administrative control of the
Ministry of Textiles, while the non-cellulosic industry is under the administrative control of the Ministry
of Chemicals and Fertilisers.
It is well-established that India possesses a natural advantage in terms of raw material availability.
India is the largest producer of jute, the second-largest producer of silk, the third-largest producer of
cotton and cellulosic fibre/yarn, and fifth-largest producer of synthetic fibres/yarn.

The industry structure is fully vertically integrated across the value chain, extending from fibre to fabric
to garments. At the same time, it is a highly fragmented sector, and comprises small-scale, nonintegrated spinning, weaving, finishing, and apparel-making enterprises. The unorganised sector
forms the bulk of the industry, comprising handlooms, power looms, hosiery and knitting, and also
readymade garments, khadi and carpet manufacturing units. The organised mill sector consists of
spinning mills involved only in spinning activities and composite mills where spinning, weaving and
processing activities are carried out under a single roof.
Market Scenario

Global Scenario
The current global apparel market is estimated at US$1,100bn with trade value of US$700bn. EU is
the largest consumer market, reaching US$350bn per annum, whilst China is the largest exporter with
US$288bn. Leading countries such as U.S, EU and Japan focus solely on highest-value stages of
textile and apparel value chain, that are designing, marketing and distribution. Meanwhile,
manufacturing activities are concentrated in China, India and other developing countries such as
Bangladesh, Vietnam, Pakistan, Indonesia, etc. The connection between manufacturers and the endusers created by traders from Hong Kong, South Korea and Taiwan is a unique trait of global textile
and apparel sector.
Figure 3: Scale of Global Apparel Industry (USD billion)

Source: Wazir Advisors

Scale of the world apparel market in 2012 reached US$1,105bn, accounting for 1.8% of global GDP.
It is forecast to reach US$2,110bn by 2025, equivalent to CAGR at about 5% per year for the period
of 2012-2025. 4 main consumer markets are the EU-27, U.S, China and Japan; with a population of
only about one third of the global population, these markets account for over 75% of global apparel
value. EU-27 is currently the largest market with a value of US$350bn per year. However, China is
forecast to become the largest market by 2025 with a value of US$540bn, equivalent to CAGR of 10%
per year for the period of 2012-2025. Brazil, India, Russia, Canada and Australia are also the largest
markets on the list. Indian market is forecast to have the highest growth rate with CAGR of 12% per
year and value of US$200bn by 2025, thus, India will surpass Japan and Brazil to become the country

with the 4th largest scale in the world. Other countries account for about 44% of the world population
but only about 7% of global apparel market.
Global textile and apparel value chain is expected to attract investment worth US$350bn over the
period of 2012- 2025.
Indian Scenario
Textile and Apparel industry is one of the most important sectors in Indian manufacturing sector
contributing around 5% of Indian GDP. It is also one of the largest contributing sectors of Indias
exports contributing 11 per cent to the countrys total exports basket. The textile industry is labour
intensive and is one of the largest employers.
The textile industry has two broad segments, namely handloom, handicrafts, sericulture, power looms
in the unorganised sector and spinning, apparel, garmenting, made ups in the organised sector. The
Indian textiles industry is extremely varied, with a hand-spun and hand-woven sector at one end of
the spectrum, and the capital intensive sophisticated mill sector at the other. The decentralised power
looms/ hosiery and knitting sector form the largest and knitting sector form the largest section of the
Textiles Sector.
The Indian textiles industry, currently estimated at around US $108 billion, is expected to reach US $
141 billion by 2021. The industry is the second largest employer after agriculture, providing direct
employment to over 45 million and 60 million people indirectly.
Indian Textile Market in 2012

Domestic Textile & Apparel Market

Technical
Textile
24%

Export
35%
Domestic
65%

Apparel
69%

Home
Textile
7%

Source: IBEF, Min. of Textiles

In 2012, apparel had a share of 69 per cent of the overall market; textiles contributed the remaining
31 per cent. Government has established 75 apparel training and design centres across India to
improve technical skills in apparel industry government. Government has also approved Apparel park
for exports at 12 locations to promote apparel exports.

India's Textile Export Share for 2012-13

3% 4%
3%
Readymade Garment

17%

39%

Cotton Textiles
Man-made Textiles
Handicrafts
Silk & Handloom
Woolen & Others

34%

Source: IBEF

Readymade garments was the largest contributor to total Shares in Indias textile exports (FY12P)
with a share of 39 per cent Cotton and man-made textiles were the major contributors with shares of
34 per cent and 17 per cent, respectively.
Textile and apparel sector has been growing to increased penetration of organised retail, favourable
demographics and rising income level to drive textile demand. India has abundant availability of raw
materials for this industry such as cotton, wool, silk and jute. Textile industry is also supported by
policies like 100% FDI through automatic route and Scheme for Integrated Textile Park (SITP) to
facilitate setting up of textile parks with world class infrastructure facilities.
The textiles sector has witnessed a spurt in investment during the last five years. The industry
(including dyed and printed) attracted foreign direct investment (FDI) worth Rs 6,710.94crore (US$
1.11 billion) during April 2000 to February 2014.
Chhattisgarh Scenario
The State of Chhattisgarh has emerged as a lucrative investment hub among its competing states
with sectors like power, mining and minerals, manufacturing, sponge iron and steel, IT and ITeS,
biotechnology, food processing etc. becoming key investment drivers and has attracted both domestic
and foreign investment over the past few years. The investment flow into the State has increased
significantly in the past five years. Chhattisgarh attracted foreign direct investments in power,
manufacturing, services, mining and construction sector. The State is steadily garnering support from
the investors, transforming it to a manufacturing and power hub of the country. While the State
administration is based in Raipur, a new capital for Chhattisgarh at Naya Raipur has been developed.
Chhattisgarh in its industrial policy has declared textile as priority sector. Chhattisgarh is one of the
premier states in production of tassar cocoons, yarn and fabrics. Silk products from state are famous
for its quality and have good demand in country as well as international markets.

Chhattisgarh state industrial corporation (CSIDC) is planning to set up an integrated textile park in
Village Khupri in Tilda, Raipur. CSIDC has identified a land parcel of 32 hectares for this project.
Project is being planned as per Scheme of Integrated Textile Park (SITP) of Ministry of Textiles, GoI.
The project
The proposed Textile park at Tilda is aimed at providing one stop integrated facilities with
manufacturing support, welfare and common infrastructure facilities to the prospective textile
industries. The proposed textile park is envisaged to house world class eco system for textile industry.
Project site
CSIDC has identified a land parcel admeasuring 32 hectares at Village Khapri, Tehsil Tilda, District
Raipur, Chhattisgarh for the development of the proposed Textile Park. Project will be established on
land parcel of 32 hectares in Village Khapri in Tehsil Tilda of District Raipur. The layout of the site is
set out in the exhibit below.

Project site

Proposed infrastructure in park:

The proposed textile park will consist of core facilities to be supported by common infrastructure
facilities and support infrastructure facilities. The details of the proposed infrastructure facilities are
provided in the table below.
Common Infrastructure

Support Infrastructure

Core Facilities

Facilities
Testing
laboratory(Including
equipment)
Design centre (Including
equipment)
Training Centre

Boundary wall

Open Plots

Roads
Electricity supply

Multi-tenanted factory
space

Common Solid Waste

Management & Disposal
System

Trade & display centre

Conferencing and Meeting

Treated Water Supply

System

Facilities
Warehouse/ raw material

Storm Water Management

Rain water Harvesting

depot

Common Effluent

Common Infrastructure

Support Infrastructure

Core Facilities

Facilities
Packaging unit
Canteen/worker hostels

Treatment Plant
Street Lights

Recreation centre
The proposed activities have been so chosen so that this Project proves to be a one stop solution for
Textile manufacturing units.
Proposed activities in park:
Following activities of proposed in Textile Park:
Ginning & Pressing
Spinning Mill
Weaving
Processing
Knitting
Garmenting
Proposed cost:
Project cost of the proposed Integrated Textile Park is approx. INR 110 crores.
Project structuring:

The project is envisaged to be developed under the Scheme of Integrated Textile Park set out
by Ministry of Textile, Government of India.

Implementation of scheme will be through a Special Purpose Vehicle (SPV) which will carry out
the business of developing, operating and maintaining the infrastructure, amenities and other
common facilities created in Textile Park.

The structuring for the proposed SITP at Tilda is as set out below:

As demonstrated in the figure above, CSIDC will be the JV Promoter, forming a SPV with at least 8
promoters, out of which minimum 3 should be in textile manufacturing, and other investors, Wherein,
CSIDC cannot hold more than 49% of the equity.
Interventions from Government of Chhattisgarh
Chhattisgarh has identified Textile Manufacturing as a Priority Sector in States Industrial Policy
2014-19. Definition of medium, large and mega projects for Textile sector is as follows.
Medium industry
Large industry
Mega industry

Investment in plant and machinery is upto INR 10 crores

Investment in plant and machinery is between INR 10 crores and
INR 50 crores
Investment in plant and machinery is between INR 50 crores and
INR 100 crores

Some of the key incentives/ subsidies available under the policy to units in Priority Sector are:

Interest subsidy
For Medium and Large Industries:
Area
In industrially developing
areas

50% of the total interest paid up to 5 years maximum limit Rs. 20 lakh p.a.

In industrially backward
areas

60% of the total interest paid up to 7 years maximum limit Rs. 40 lakh p.a.

For Mega Industries:

Area

Priority Industry

Priority Industry

In industrially developing
areas

50% of the total interest paid up to 6 years maximum limit Rs. 60 lakh p.a.

In industrially backward
areas

70% of the total interest paid up to 8 years maximum limit Rs. 100 lakh p.a.

Fixed Capital Investment subsidy

Medium Scale Industry
Area

Priority Industry

In
industrially
developing
areas

35% of the fixed capital investment - maximum limit is Rs. 70 lakh

or
Limited up to 70% of the fixed capital investment, maximum time
period 6 years, whichever ends first

In
industrially
backward
areas

45% of the fixed capital investment - maximum limit is Rs. 100

lakh or
Limited up to 80% of the fixed capital investment, maximum time
period 7 years, whichever ends first

Large Scale Industry

Area
In
industrially
developing
areas

Priority Industry
35% of the fixed capital investment - maximum limit is Rs. 110
lakh or
Limited up to 90% of the fixed capital investment, maximum time
period 8 years, whichever ends first

In
industrially
backward
areas

45% of the fixed capital investment - maximum limit is Rs. 120

lakh or
Limited up to 100% of the fixed capital investment, maximum time
period 9 years, whichever ends first

Mega Scale Industry

Area

Priority Industry

In
industrially
developing
areas

40% of the fixed capital investment , Maximum limit is

Rs. 350 Lakh

In
industrially
backward
areas

50% of the fixed capital investment, Maximum limit is

Rs. 500 Lakh

Electricity Duty exemption

Medium and Large Scale Industry
Area

Priority Industry

In
industrially
developing areas

Full exemption up to 7 years from the date of commencement of

commercial production

In
industrially
backward areas

Full exemption up to 10 years from the date of commencement of

commercial production

Mega Scale Industry

Area

Priority Industry

In
industrially
developing areas

Full exemption up to 8 years from the date of commencement of

commercial production

In
industrially
backward areas

Full exemption up to 10 years from the date of commencement of

commercial production

100% Exemption on Stamp Duty

o
On Purchase / lease deeds executed for purchase/lease of land, shade and buildings
and deeds of transfer of land on lease (excluding mining lease, land)
o
Up to 3 years on the execution of deeds related with loan & advances from the date of
sanction of loan by bank/financial institutions.
o
On purchase/lease of land in Industrial areas/ park established in private sector
sanctioned/approved by the Govt. of India/State Government.
o
On the land purchased by the Chhattisgarh State Industrial Development Corporation
limited for industrial area/industrial plot/industrial purposes, land bank and
infrastructure creation.
Exemption/ concession in land premium on land allotment in industrial areas/
industrial parks
Medium Scale Projects
Area
Priority Industry
In industrially developing
areas

50 % exemption in land premium

In industrially backward
areas

60 % exemption in land premium

Large & Mega projects

Area

Priority Industry

In industrially developing areas

20 % exemption in land premium

In industrially backward areas

25 % exemption in land premium

100% Entry Tax exemption

Medium/Large/Mega projects
Area

Priority Industry

In industrially developing
areas

exemption up to 6 years

In industrially backward
areas

exemption up to 7 years

Way ahead
CSIDC has issued EOI on March 3, 2015 for selection of partners for SPV that will undertake
development, operation and management of Integrated Textile Park.
Interested entities/joint ventures/consortiums are requested to submit EOI providing following details
to CSIDC office on or before April 30, 2015:
Details of the company / each member of the consortium.
Audited annual accounts of the company /all the consortium members for the 3 years.
Details of the technical expertise and operational experience in Textile Manufacturing sector
giving details for each project - the year of establishment, cost of the project etc.