The textiles ministry, for the first time, has proposed to set up a technological mission for technical textiles in line with those for natural fibres like cotton and jute and special incentives to attract foreign direct investment (FDI) in this sector.
As part of the draft national fibre policy, a Cabinet note has been prepared for inter-ministerial consultations to work out a comprehensive policy framework for the sector.
Officials explained that while a foreign company could come to India on its own, as FDI in textiles is 100 per cent under the automatic route, the policy is intended to boost domestic companies engaged in the manufacturing of technical textiles and related raw materials — Haldia Petrochemicals, GAIL Ltd, Reliance Industries, SRF, Indo Rama Synthetics, Zenith fibers, Century Rayon and Unifrax India.
Officials said Indian companies were heavily engaged in synthetic fibre, which is a downstream product of petrochemicals like polypropylene, viscose and polyethylene, but have shied away from upgrading the chemical into forming technical textiles due to lack of technology.
Technical textiles are materials and products used for their technical performance and they differ from other man-made or synthetic fibre for using very high grade of petrochemicals so as to render high tenacity and high resistance to the fibre. While polyester, viscose, nylon and polypropylene account for 70 per cent of the total fibre used in technical textiles, specialty fibres of upgraded variety comprise the rest 30 per cent.
The policy framework for technical textiles is aimed at indigenous development of this 30 per cent of the raw material since most of it is imported at present.
For both Indian and foreign companies, the technology mission will fund and support research and development, work out market development scheme, world-class testing facilities and incubation centres for technical textiles. This will be primarily for four categories of fibres where India has a huge demand, like high tenacity flame retardant, carbon and glass fibre and modacrylic fibres, the report says.
The special incentive package includes proposals to exempt Customs duty on the import of capital equipment, reduce excise duty from eight per cent to four per cent on focus fibres and exempt technical textiles from the general sales tax for a period of two years, so as to realign the existing anomalies in value added tax first.
The ministry has also roped in consultants to propose amendments in various laws to make use of technical textiles mandatory for fire-retardant fabrics used in exhibition centres, cinema halls and other public halls, fire fighting personnel, geo-synthetics for infrastructure projects, usage in disposable medical products and defence apparel like bulletproof jackets. It has been also proposed that the policy for infrastructure projects should be changed from the build-operate-transfer method to the design-build-operate-transfer formula so that the latest technology can be used for geo-textiles.
For FDI, the note has proposed that a joint venture with an Indian partner is a preferred route. The special incentive scheme for attracting FDI and domestic companies involves setting up a unit, with government equity participation not exceeding 26 per cent, or capital subsidy in the form of investment grant and interest subsidy.
The ministry hopes the technical textile segment in India will attract investments worth Rs 5,000 crore by 2012.
