THE JHARKHAND GAZETTE EXTRAORDINARY PUBLISHED BY AUTHORITY 9 Poush, 1938 (S) No. 14 Ranchi, Friday 30th December, 2016 Jharkhand Textile, Apparel and Footwear Policy 2016 Table of Contents 1. INTRODUCTION 2 2. TEXTILE AND APPAREL SECTOR IN INDIA 4 3. TEXTILE AND APPAREL SECTOR IN JHARKHAND 6 4. VISION AND OBJECTIVES 11 5. CAPACITY BUILDING 12 6. STRATEGY FOR SECTOR DEVELOPMENT 17 7. INCENTIVES, EXEMPTIONS AND CONCESSIONS OFFERED BY GOVERNMENT OF INDIA 26 8. INCENTIVES, EXEMPTIONS AND CONCESSIONS OFFERED BY GOVERNMENT OF JHARKHAND 32 9 PROJECT MANAGEMENT AGENCY (PMA) FOR MONITORING SCHEMES 38 10 PROCEDURE FOR DISPOSAL OF APPLICATIONS 39 11 MISCELLANEOUS PROVISIONS 41 ANNEXURE -I 43 ANNEXURE -II 45 2 Jharkhand Gazette (Extraordinary), Friday 30th December, 2016 Department of Industries, Mines and Geology ----------- Notification 19th september, 2016 Memo No.: 06/U.Ni./Textile and Apparel Policy 2016/ 05/ 2016 - 3081 1. Introduction 1.1 Jharkhand, one of India’s newest states, was carved out of the southern portion of Bihar in 2000. It is a land locked territory bound by the state of Bihar on the north, West Bengal on the east, Orissa on the south, and Chhattisgarh on the west. Jharkhand’s proximity to the Ports of Kolkata (400 km from Ranchi), Haldia (420 Km from Ranchi) and Paradeep (560 Km from Ranchi), makes the State attractive for it to be an ideal location for Export Oriented Units (EOUs), interested to enter in emerging markets of South East Asia considering the freight advantage with safe, smooth and faster movement of their produce. In addition to this, Jharkhand is also having dry port facility at Jamshedpur. 1.2 The industrial city of Ranchi is its capital and Dumka its sub capital and Jamshedpur as the largest city in the state and one of the most industrialized cities in the Country. The region with an area of 74,677 sq. km and a population of 32 million has infinite scope for growth and development. 1.3 With an enormous potential for industrialisation and large deposits of minerals (around 40 percent of India’s mineral wealth) which provide a solid launching pad for all kinds of industries, the state is widely acclaimed as the region of future. It ranks first in the country in production of Tasar Silk as well as in the production of Coal, Mica, Kyanite and Copper in India. 1.4 The state is rich in forests and minerals complementing its vibrant tribal culture, art and crafts. The uniqueness of natural resources existing in the state has supported many crafts which are being traditionally practiced. Stone artefacts of Palaeolithic age, Malhore's Dhokra, iron-smelting culture of Asurs, painted rock caves of Barkagaon in Hazaribagh, all point to early metallic and artisanal traditions. Tribals from Austo- Asiatic, Dravidian and Indo-Aryan families along with the latter settlers have added new dimensions to art and craft of the state which has made Jharkhand’s past a prologue to its future. Wild taser silk, lac, sal and palm leaves and other forest produce remain important to craft production in the state. It’s not enough to call Jharkhand a treasure house of ethnic arts and crafts. It is a repository of memory, of beauty, of generosity, of authenticity, of values, and of extraordinary and unexpected potential that reflect Jharkhand’s ability to reach beyond words, to follow their dreams. Jharkhand Gazette (Extraordinary), Friday 30th December, 2016 3 1.5 There has been large scale change in industrial environment due to economic liberalisation, privatisation and globalisation. Strong emphasis is being placed on Micro, Small and Medium Enterprises (MSME). Clusterisation is being promoted, pollution norms have become more stringent, concept of ‘go’ and ‘no go’ zoning has been developed for mining clearances etc. 1.6 The Jharkhand Government is working towards improving exports, skill development, mineral based products, handicrafts, handlooms, agriculture and processed food products to ensure increased industrial development across the state. Jharkhand is also wooing investors in mineral exploration, plastics and rubber, chemicals, electrical, cement, metallurgy and automobile components, and equipments for heavy engineering companies. 1.7 Around 30% of Jharkhand’s geographical area is covered with highly bio- diversified forests, thus giving opportunity for development of minor forest produce based industries and herbal based industries. Also, its agro-climatic condition is suitable for development of agri-based and allied sector industries. 1.8 Jharkhand is progressing fast on adopting best practices for making an investor friendly environment in the state to facilitate investments, employment generation and welfare of the people. Measures like Jharkhand Investment Promotion Board, single window clearance, online payments, online verification, third party certifications, self- certification, time bound approvals, availability of information online, standard operating procedures for approvals, deemed approvals, etc. are being adopted by various departments and government agencies. 1.9 Jharkhand has always offered a wide range of industries with a strong locational advantage with smooth access to natural resources, such as minerals and water, located in close proximity to advanced as well as emerging markets. The vast potential of the Indian hinterland is open to it, and the State has access to all major ports of the east, including the region’s only weather deep port at Dhamra. Such favourable conditions have attracted large number of industries to Jharkhand. With industries coming to Jharkhand on one hand, and a large population base (25% of country’s population including population of Jharkhand and adjoining states) on the other, Jharkhand has opened up a plethora of opportunities for the investors and the markets as a whole. 4 Jharkhand Gazette (Extraordinary), Friday 30th December, 2016 2. Textile and Apparel Sector in India 2.1 India’s textiles sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to India’s exports with approximately 11 per cent of total exports. The textiles industry is also labour intensive and the second largest employer after agriculture. The industry realised export earnings worth US$ 41.4 billion in 2014-15, a growth of 5.4 percent. 2.2 The textile industry has two broad segments. First, the unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale. 2.3 The Indian textiles industry is extremely varied, with the hand-spun and handwoven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world. 2.4 Market Size 2.4.1 The Indian textiles industry, currently estimated at around US$ 108 billion, is expected to reach US$ 223 billion by 2021. The industry is the second largest employer after agriculture, providing employment to over 45 million people directly and 60 million people indirectly. The Indian Textile Industry contributes approximately 5 per cent to India’s Gross Domestic Product (GDP), and accounts for 14 per cent of the world's production of textile fibres and yarns (largest producer of jute, second largest producer of silk and cotton, and third largest in cellulosic fibre). India has the highest loom capacity (including hand looms) with 63 per cent of the world's market share 2.5 Textile and Apparel exports 2.5.1 Textile and apparel exports from India are expected to increase to US$ 82 billion by 2021 from US$ 40 billion in 2014. Readymade garments remain the largest contributor to total textile and apparel exports from India. In FY15 the segment had a share of 40 per cent of all textile and apparel exports. Cotton and man-made textiles were the other major contributors with shares of 31 per cent and 16 per cent, respectively. 2.5.2 Rising government focus and favourable policies is leading to growth in the textiles and clothing industry. Foreign direct investment (FDI) in textile sector increased to US$ 1,587.8 million in FY15 from US$ 1,424.9 million in FY14. The Ministry of Textiles is encouraging investments through increasing focus on schemes such as Amended Technology Up-gradation Fund Scheme (ATUFS). Jharkhand Gazette (Extraordinary), Friday 30th December, 2016 5 2.5.3 As per the 12th Five Year Plan, the Government plans to provide a budgetary support of US$ 4.25 billion to textiles. Free trade with ASEAN countries and proposed agreement with European Union will also help boost exports. 2.6 Initiatives of Government of India: 2.6.1 The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route. Some of initiatives taken by the government to further promote the industry are as under: a) The Union Cabinet has cleared a Rs 6,000 crore (US$ 889.44 million) package for the textile sector, aimed at attracting investments worth Rs 74,000 crore (US$ 10.95 billion) generating 10 million jobs and increasing textile exports by US$ 30 billion in the next three years. b) The Department of Handlooms and Textiles, Government of India, has tied up with nine e-commerce players and 70 retailers to increase the reach of handlooms products in the Indian market, which will generate better prices and continuous business, besides facilitating direct access to markets and consumers for weavers. c) The Union Ministry of Textiles, which has set a target of doubling textile exports in 10 years, plans to enter into bilateral agreements with Africa and Australia along with working on a new textile policy to promote value addition, apart from finalising guidelines for the Amended Textile Upgradation Fund Scheme (ATUFS). d) The Government of India has started promotion of its ‘India Handloom’ initiative on social media like Facebook, Twitter and Instagram with a view to connect with customers, especially youth, in order to promote high quality handloom products. e) The Ministry of Textiles launched Technology Mission on Technical Textiles (TMTT) with two mini-missions for a period of five years (from 2010-11 to 2011-12 in the 11th five year plan and 2012-13 to 2014-15 in 12th five year plan) with a total fund outlay of Rs 200 crore (US$ 29.6 million). The objective of TMTT is to promote technical textiles by helping to develop world class testing facilities at eight Centres of Excellence across India, promoting indigenous development of prototypes, providing support for domestic and export market development and encouraging contract research. f) The Government of India is expected to soon announce a new National Textiles Policy. The new policy aims at creating 35 million new jobs by way of increased investments by foreign companies g) Subsidies on machinery and infrastructure i. The Amended Technology Up gradation Fund Scheme (ATUFS) covers one time capital subsidy for investments in the employment and technology intensive segments of the textile value chain with maximum subsidy for overall investment restricted to Rs 30 crore . 6 Jharkhand Gazette (Extraordinary), Friday 30th December, 2016 ii. Under the Scheme for Integrated Textile Parks (SITP), the Government of India provides assistance for creation of infrastructure in the parks to the extent of 40 per cent with a limit up to Rs 40 crore (US$ 6 million). Under this scheme the technical textile units can also avail its benefits. iii. The major machinery for production of technical textiles receives a concessional customs duty list of 5 per cent. iv. Specified technical textile products are covered under Focus Product Scheme. Under this scheme, exports of these products are entitled for duty credit scrip equivalent to 2 per cent of freight on board (FOB) value of exports h) The Government of India has implemented several export promotion measures such as Focus Market Scheme, Focus Product Scheme and Market Linked Focus Product Scheme for increasing share of India’s textile exports. i) Under the Market Access Initiative (MAI) Scheme, financial assistance is provided for export promotion activities on focus countries and focus product countries. j) Under the Market Development Assistance (MDA) Scheme, financial assistance is provided for a range of export promotion activities implemented by Textiles Export Promotion Councils. k) The government has also proposed to extend 24/7 customs clearance facility at 13 airports and 14 sea ports resulting in faster clearance of import and export cargo. l) The Ministry of Textiles has approved a 'Scheme for promoting usage of geotechnical textiles in North East Region (NER)' in order to capitalise on the benefits of geotechnical textiles. The scheme has been approved with a financial outlay of Rs 427 crore (US$ 63.3 million) for five years from 2014-15. m) A Memorandum of Understanding (MoU) has been signed between India and Kyrgyzstan seeking to strengthen bilateral cooperation in three fields -Textiles and Clothing, Silk and Sericulture, Fashion. 3. Textile and Apparel Sector in Jharkhand 3.1 Jharkhand, in its Industrial and Investment Promotion Policy 2016 has declared textile as a “Thrust Area”. Jharkhand has experienced phenomenal growth in Sericulture Sector. In order to maintain the leading edge and rejuvenate existing rural industries including sericulture, handloom, handicraft, khadi, textile etc., it is envisaged to assist them in modernization/technological up-gradation and provide necessary common facilities, backward and forward linkages including product design, marketing support etc. so as to make them globally competitive and their product remunerative. Silk products from state are famous for its quality and have good demand in country as well as international markets. 3.2 Jharkhand ranks first in the country in production of Tasar Silk. In order to maintain the leading edge and give special thrust to the sector, Jharkhand Gazette (Extraordinary), Friday 30th December, 2016 7 Jharkhand Silk, Textile and handicraft Development Corporation (JHARCRAFT) was established in 2006 to provide support in design, training, entrepreneurship development, marketing, raw material support in clustered and organized manner by grouping local artisans, SHG’s and NGOs involved in similar activities. 3.3 JHARCRAFT has emerged as a brand not only in the country but also abroad. JHARCRAFT is supporting more than 2.0 lakh rearers, reelers, spinners, weavers, artisans etc. It also maintains cocoon banks using existing infrastructure besides creating new infrastructure with the financial support of the State Government and has 18 marketing outlets in cities including Ranchi, Delhi, Kolkata, Bangalore, Ahmedabad and Mumbai. Marketing is also being extended under franchisee mode. 3.4 Development of Handloom 3.4.1 In addition to silk weaving, state has taken steps for revival of cotton wool weaving. Handloom fabric woven with cotton, wool or silk yarn has a strong presence in the districts of Ranchi, Latehar, Palamu, Ramgarh, Dhanbad, Bokaro, Godda, Pakur, Sahebganj and Khunti. There are 162 Primary Weavers Co-operative Societies and one Regional Handloom Co-operative union in the State. They were under stress since 1996 as there was paucity of raw materials, lack of new designs and marketing opportunities. This sector has been revived after a gap of 12 years. 3.4.2 More than 80 societies have become functional. In Palamu area, wool weaving is done traditionally. Earlier, very coarse blankets and shawls were weaved. Today, good quality blankets, shawls, tweeds, scarves and mufflers are being woven. 3.4.3 In cotton clusters also, quality of weaving has improved. Earlier fabrics were woven on 48-52 reeds; today, 100-120 reeds are used. Yarn of 2/17, 2/20 and 10s were used; now weavers are using 2/40, 2/60, 2/80, 100-200 count yarns for finer weaving. They have started using jacquard and dobby also. 3.4.4 Fifteen cluster development schemes are being implemented for cotton weavers, for carpet and wool weaving. This will help create employment for more than 4000 weavers in the next two years. 3.4.5 35 mini handloom clusters have been sanctioned by Government of India with each cluster consisting of 250-300 weavers. The scheme is being implemented by Jharcraft with an objective to: • Provide basic infrastructure to weavers such as looms and accessories • Training for skill upgradation, design support and marketing support 3.5 Mega Handloom Cluster 3.5.1 The Mega Handloom Cluster scheme has been sanctioned by Government of India; Developer and consultants have also been selected. DPR of Mega Handloom cluster has been approved by PAMC under comprehensive Handloom Cluster Development scheme (CHCDS). All six districts of Santhal Pargana i.e. Deoghar, Dumka, Godda, Sahebganj, Jamtara and Pakur will be covered under this Mega Handloom cluster. 3.5.2 DPR of the said Mega cluster with total project cost of Rs. 76.57 crore (with GoI’s share of Rs. 69.99 crore and remaining Rs. 6.58 crore by 8 Jharkhand Gazette (Extraordinary), Friday 30th December, 2016 SPV/beneficiary/State Govt.) has been approved by PAMC. About 25000 handlooms will become functional at the end of fifth year of project and this will help more than 1,00,000 weavers. 3.6 Development of Sericulture 3.6.1 Jharkhand, traditionally a Tasar producing state, is the leading producer of Tasar silk in the country. It was mainly producing Tasar cocoons (Raw material of Tasar silk). 3.6.2 Jharkhand accounts for seven per cent share in India’s silk production and 40% share in the tasar silk production. The state has 76.4 per cent share in the total output. In 2014-15, the production of raw silk stood at 1,946 metric tonnes. Jharkhand primarily exports tasar silk to the US, the UK, Germany, France, Turkey, Japan, Australia, Sweden and Switzerland. 3.6.3 State Govt. is keen to develop Tasar post cocoon activities in the state in view to provide employment opportunities particularly for the women in the rural areas. To develop post cocoon activities, Common Facility Centres (CFCs) are being established where facility of reeling machines and other necessary equipment are provided for Tasar silk reeling for a group of 30 women. After training, the women group is involved in production of Tasar silk. The marketing support is provided by Jharcraft. a) It is proposed to organize reares, spinners, reelers and weavers into SHG and clusters on prominent place in industrial areas, urban centre, district HQ etc. in park mode activities b) It is proposed to strengthen one year certificate course of JSTDI, Chaibasa in consolidated course covering Sericulture, weaving, Dyeing and Printing in common syllabus c) For meeting physical target, efforts will be made to get financial assistance from Central Silk Board, NABARD, RKVY, National Livelihood Mission and National Skill Development Corporation including other funding agencies of GOI (welfare dept. etc.) d) It is also proposed to earmark some funds for Research and Innovations in this sector e) In addition to rearing of Daba Eco Race, efforts will be made for the rearing of Laria Eco Race of Tasar on Sal trees. This is going to be one of the important activities in this sector. This will pave the way for export oriented Tasar silk production in the country. Jharkhand will guide the other States in Tasar sector f) Ahinsa and organic branding of silk with competent certification will be ensured 3.7 Textile and Apparel Parks Industrial area with common infrastructure needed for textile and apparel industries plays a major role in development of textile and apparel sector in the state. Again, specialization of a particular product based on the location, raw material and other advantages boosts the niche market contribution in the state. With this in mind, Jharkhand has already developed few parks in the Textile and apparel sector and has proposed to build some more in this area. Jharkhand Gazette (Extraordinary), Friday 30th December, 2016 9 3.7.1 Silk Park at Rajnagar (Saraikela-Kharsawan) Government of Jharkhand has sanctioned setting up of a Silk Park at Rajnagar, Saraikela Kharsawan for development of Handloom, silk and other related activities. The implementing agency for this project is Jharcraft. Spread over an area of 5 acres, the Silk Park shall include basic infrastructure such as Grainage buildings, each having Taser seed cocoon Preservation capacity of 1 lakh, CFC (Reeling/ Spinning) cluster sheds, weaving cluster sheds, deep boring, pump house, boundary wall etc. Employment generation to the tune of 3500 people, including 2800 taser growers, 240 women spinners and 160 weavers shall take place as a result of establishment of this silk park. 3.7.2 Silk Park at Irba, Ranchi: The state government is setting up silk parks in 4 districts to promote exports. During the first phase of project, INR 14-crore Silk Park is being set up in Ranchi for reeling, spinning, weaving, Dyeing and finishing units. This will significantly boost the handloom sector in the state and lead to employment generation and value addition of the diversified production of Handloom. It shall house facilities like loom centres, dyeing halls, laboratories, design centres, dispensary, exhibition hall, retail sales division and godowns. A weavers' training centre will impart training for better end results. The park is spread in 5 acres of land on Irba Road in Ranchi and is being developed by JINFRA under ASIDE scheme. The main objective behind setting up a silk park is to promote exports in the state, which will in-turn add to its economic development. 3.7.3 Mega Textile Park at Deoghar Government of Jharkhand through Jharkhand Industrial Infrastructure Development Corporation (JIIDCO) has proposed Mega Textile Park at Mohanpur, Deoghar district over an area of around 250 acres for carrying out activities such as ginning and pressing, spinning mill, weaving, processing, knitting and garmenting. Government of Jharkhand intends to seek assistance of Government of India to an extent of INR 200 crore in developing the aforementioned Mega Textile Park. This will enable government to avail 100% FDI under the automatic route in the textile sector without seeking any prior approval and create conducive ecosystem for promoting private investments - domestic and global. This project also intends to avail the opportunity of the immense scope for expansion and employment generation ability of textile sector. It is expected that the project will generate employment of around 5500 - 6000 semi-skilled employees and another 1200-1800 skilled employees. With the development of these industries, multiplier effect will herald overall economic development of the region in terms of new constructions, new services, facilities and systems etc. which would bring in additional employment to 18000 people. 10 Jharkhand Gazette (Extraordinary), Friday 30th December, 2016 The project is envisaged to be developed under the Scheme of Integrated Mega 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 Mega Textile Park. Infrastructure in the park shall include common facilities such as Testing laboratory(Including equipment), Design centre (Including equipment), Training Centre, Trade and display centre, Conferencing and Meeting Facilities, Warehouse/ raw material, Packaging unit, Canteen/ worker hostels, Workers hostels, Recreation centre etc. Also, the support infrastructure shall include Boundary wall, Roads, Electricity supply, Common Solid Waste Management and Disposal System, Treated Water Supply System, Storm Water Management, Rain water Harvesting, Common Effluent Treatment Plan and Street Lights.