Gujarat to aid textile firms' expansion plans

With the World Trade Organisation (WTO) regime set to be in place by the end of this month, the government of Gujarat has lined up a project to facilitate expansion plans in the textile sector.

Under the plan the government will provide land to projects of size up to Rs 125 crore to manufacture denim fabric and formal trouser.

The government has also identified land in Ahmedabad, Vadodara, Surat and Himmatnagar for the plan and has appointed the Industrial Extension Bureau (Indextb) as the co-ordinating organisation for the project.

Textile majors such as Arvind Mills, Ashima Group, Welspun Group, Raymonds, Reliance Industries, Arvee Denims and Exports are heavily investing in capacity expansion and are exploring new avenues for exports.

"We have come out with a detailed project for setting up manufacturing facility of formal trouser with a capacity of three million pieces per annum at an investment of Rs 25 crore and a denim fabric facility of 10 metric tonne per annum with an investment of Rs 100 crore. We will try to keep Gujarat's leading position in the textile sector intact," said Chandan Chatterjee, general manager, technology and projects, Indextb, a Gujarat government enterprise, on Thursday.

India manufactures close to 10 per cent of the world's trouser fabric, but it has a negligible share in the ready-to-wear garments like trousers.

"Financial returns in the manufacturing of formal trousers is expected to be over 25 per cent and in denim fabric it is expected to be over 15 per cent. The denim fabric is growing at a constant rate of six per cent. Overall growth in the sector is due to the steady growth of the garment sector at 25 per cent per annum," said Chatterjee.

The companies are eyeing the possibility of getting imported second hand machinery to lower the cost of production and avail the five per cent interest subsidy in under the Technology Upgradation Fund scheme of the Central government.