India Investment slows down in textiles

Hit by several factors, the textile and clothing industry in the country seems to have made minimal investment in expansions and new projects this year.

The Union Ministry of Textiles announced the Restructured Technology Upgradation Fund Scheme (R-TUFS) in April 2011 with subsidy cap for each value adding segment, such as spinning, weaving and processing. The total subsidy amount allocated for 2011-2012 was Rs. 1,972 crore. It was expected to leverage total investment of Rs. 46,900 crore.

Of this, the unutilised amount (subsidy allocation) that was available for 2012-2013 was Rs. 497 crore.

According to the Office of the Textile Commissioner, from April 2011 to November 2012, the subsidy claimed was only Rs. 362 crore. Though 3,542 applications were received, envisaging a total investment of Rs. 35,892 crore (April 2011 to November 2012), implementation of the projects are delayed.

An industry source said that practically there were no new investments this year. The only investments made were for essential replacements.

According to Hermann Selker, Head of Marketing of Trutzschler Spinning, a major player in the spinning preparatory machinery, the demand in the Indian market in 2012 was lower than in 2011. Power availability was a problem in south India and hence, investments in textile industry were slow. However, demand was expected to pick up next year. “At the ITME in Mumbai we discussed many new projects in India for realising next year,” he said.

"We are already seeing a positive mood in the textile sector,” says Chairman and Managing Director of Lakshmi Machine Works Sanjay Jayavarthanavelu.