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Similar and perhaps better textile policies by other states like Maharashtra, Madhya Pradesh (MP) and Rajasthan coupled with recent unseasonal rains damaging cotton crop may impact Gujarat's textile policy implementation.
Industry players and experts are of the view that while Gujarat already faces tough competition from other states, especially Maharashtra, in attracting investment in textile sector through policies, the recent unseasonal rains may further impact the state policy.
Among the other states, Maharashtra's textile policy is the most competitive for Gujarat. While Gujarat has expressively stated its focus on spinning and technical textile industry, Maharashtra has been able to offer several subsidies for almost every vertical in the textile value chain.
"Gujarat has a focus on the spinning industry which is good considering the cotton availability in the state. However, there are equally good textile policies announced by Rajasthan and Maharashtra. Earlier, we were planning to set up a unit in Gujarat but now we have decided to expand in Rajasthan alone," said JC Ladha, executive director at Rajasthan Spinning and Weaving Mills (RSWM).
Earlier at an international conference on cotton here, the minister of state for energy, Government of Gujarat, Saurabh Patel had said, "Gujarat's strength is cotton but we have to boost the spinning industry. Several industry representatives had met me seeking further benefits." In September 2012, the Gujarat Chief Minister Narendra Modi had unveiled the Gujarat Textile Policy 2012 and had termed it as a 'White Revolution in Cotton'.
The Gujarat textile policy looks to attract investment of over Rs 20,000 crore as well as creating new employment opportunities for over 2.5 million people in next five years. Whereas the Maharashtra policy looks to attract Rs . 40,000 crore of investment and create 1.1 million employment opportunities in the said period.
Similarly, while Gujarat offers just a seven per cent interest subsidy for spinning and garment units and five per cent interest subsidy for rest of the units, Maharashtra offers 12.5 per cent interest subsidy coupled with a 10 per cent capital subsidy for all unit establishments.
Add to that, experts believe a cheaper land bank may also give Maharashtra an edge over Gujarat in the textile policies. "Gujarat produces more cotton than Maharashtra but the difference is not much. Also, the land prices in Maharashtra are cheaper than Gujarat which may tilt it in the former's favour," said PR Roy, founder of Diagonal Consulting, a textile consulting firm.
According to Md. Arif Khan, Minister of Textiles, Government of Maharashtra, the average land rates for textile units ranges between Rs 60 and Rs 80 per sq metres.
Meanwhile, though Gujarat is determined to enhance spinning industry in order to maximum cotton produced in the state for making yarn, the recent unseasonal rains may also impact its plans.
"Considering the amount of unseasonal rains, there are chances of the same impacting cotton arrivals in the state. This may in turn impact spinning industry's plans in Gujarat which is a major focus in the textile policy," Roy added.
