Apparel parks to be dressed up

New Delhi, March 29 | Updated: Mar 30 2005, 05:30am hrs
The government is planning to revamp the apparel park scheme, to make it a mission-mode project capable of directing substantial investments into the higher ends of the textile value chain.

A Cabinet note prepared by the textile ministry proposes to divest the state government of the role of selecting the location of apparel parks.

It envisages increased role of private agencies in design and implementation of apparel parks and promotes a model driven by demand rather than partisan considerations.

The aim, according to government sources, is to cut redtape and avoid delays. Since the scheme was firmed up three years ago, over a dozen definite proposals for establishing such parks have been made by various agencies, but the progress in implementaion has been tardy.

Only one such facility the Tirupur Apparel Park has become fully functional so far, while three other parks in Surat, Bangalore, Thiruvananthapuram and Kanchipuram are being set up.

Ministry seeks excise cut on synthetic fibre

The textile ministry has proposed reduction in excise duty on all synthetic fibres from 16% to 8%, in a post-budget note to the finance ministry. The ministry has also recommended 5% concessional import duty on all textile machinery. Budget 05 had brought a number of textile machinery items under 10% import duty.
In the note, the textile ministry has argued that tax incidence on cotton and synthetic textile sector should ideally be at par. At present, the cotton textile chain is subject to substantially lower tax incidence, with lower duty rates and the option of Cenvat chain exemption.

The proposed mission-mode is expected to ensure faster implementation of a large number of apparel parks. However, the new model would not offer any additional financial incentives for these parks, sources said.

We want to remove certain riders, which have proved to be stumbling blocks in implementation of apparel parks, said an official.

Apparel parks are expected to play a major role in attracting investments in the garment industry and equipping India to face the challenge of the quota-free global trade that began in January.

Garment industry has been totally de-reserved from the SSI sector. While woven garment sector was de-reserved in 2002, the knitwear sector was dereserved in Budget 2005.