Govt plans to set up textile SPV to help rupee-hit sector
The government will soon form a special purpose vehicle (SPV) to boost the textile industry, which has been hit hard by the appreciating value of the rupee against the dollar.
By Niranjan Bharati, TNN |
NEW DELHI: The government will soon form a special purpose vehicle (SPV) to boost the textile industry, which has been hit hard by the appreciating value of the rupee against the dollar. The proposed SPV will have participation from all 11 export promotion councils (EPCs) and will be entrusted with the task of tying up with large buying agents overseas. It would get an annual budgetary allocation from the government.
The SPV will also have the responsibility of bringing foreign direct investment (FDI) into the country by inviting manufacturers of textile machinery to set up their base in the country. The SPV will have independent decision-making powers and will also set up retail outlets globally including at major international airports like London, Paris, New York and Toronto.
The proposal mandates the incorporation of a holding company, an SPV, of all the export promotion councils in textiles and clothing towards the objectives of the scheme. The 11 councils which will form the SPV include Apparel Export Promotion Council (AEPC), Cotton Textile Export Promotion Council(TEXPROCIL), Synthetic Rayon Textile Export Promotion Council ( SRTEPC), Powerloom Development Export Promotion Council(PDEXCIL), Indian Silk Export Promotion Export Promotion Council (ISEPC), Jute Manufacture Development Council (JMDC) and Wool and Woollen Export Promotion Council (WEPC), among others.
���The role of a holding company will include need assessment, mobilisation of resources, assisting the enterprises in designing and launching the brands in selected markets, forging linkages with key stake holders and other hand holding support,��� an official in the textile ministry said.
An integrated textile promotion will be carried out in prospective markets identified on the basis of in-depth product-country potential analysis. The SPV will analyse world trade data for identification of top potential markets and products and pinpoint specific items and markets for stepping up India���s export of textile and clothing articles. In all there would be 33 item groups which the SPV would promote.
Individual companies will also be allowed to take advantage of this generic promotion effort by stepping up their own brand promotion efforts in tandem. This is expected to create a favourable climate for attracting FDI in textiles and clothing sector. The SPV will organise international textile expositions twice every year, one each in New Delhi and Mumbai, showing the entire range of Indian products. The member companies will also be allowed to export goods for holding or participating in exhibitions abroad, sell the products in the permitted shops set up abroad or in the showrooms of their distributors or agents. they would also be allowed to set up show-rooms and retail outlets at the international airports.
The funds under the budget allocation shall be placed at the disposal of the holding company by the ministry of textile after the approval of the annual action plan. The government would have the right to audit the expenditure of the proposed SPV.
There will be two government nominees on the board of holding company. The board of directors of holding company will comprise all the chairmen of EPCs and the post of president of the board will be rotational for two years by taking nominees from AEPC, TEXPROCIL and SRTEPC. The office of the holding company shall be in Apparel House, Gurgaon. The secretary general, AEPC shall be the managing director of the holding company. The holding company shall also raise finances from the contribution of EPCs and EPC members in addition to the government grant per annum.
The SPV will also have the responsibility of bringing foreign direct investment (FDI) into the country by inviting manufacturers of textile machinery to set up their base in the country. The SPV will have independent decision-making powers and will also set up retail outlets globally including at major international airports like London, Paris, New York and Toronto.
The proposal mandates the incorporation of a holding company, an SPV, of all the export promotion councils in textiles and clothing towards the objectives of the scheme. The 11 councils which will form the SPV include Apparel Export Promotion Council (AEPC), Cotton Textile Export Promotion Council(TEXPROCIL), Synthetic Rayon Textile Export Promotion Council ( SRTEPC), Powerloom Development Export Promotion Council(PDEXCIL), Indian Silk Export Promotion Export Promotion Council (ISEPC), Jute Manufacture Development Council (JMDC) and Wool and Woollen Export Promotion Council (WEPC), among others.
���The role of a holding company will include need assessment, mobilisation of resources, assisting the enterprises in designing and launching the brands in selected markets, forging linkages with key stake holders and other hand holding support,��� an official in the textile ministry said.
An integrated textile promotion will be carried out in prospective markets identified on the basis of in-depth product-country potential analysis. The SPV will analyse world trade data for identification of top potential markets and products and pinpoint specific items and markets for stepping up India���s export of textile and clothing articles. In all there would be 33 item groups which the SPV would promote.
Individual companies will also be allowed to take advantage of this generic promotion effort by stepping up their own brand promotion efforts in tandem. This is expected to create a favourable climate for attracting FDI in textiles and clothing sector. The SPV will organise international textile expositions twice every year, one each in New Delhi and Mumbai, showing the entire range of Indian products. The member companies will also be allowed to export goods for holding or participating in exhibitions abroad, sell the products in the permitted shops set up abroad or in the showrooms of their distributors or agents. they would also be allowed to set up show-rooms and retail outlets at the international airports.
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The funds under the budget allocation shall be placed at the disposal of the holding company by the ministry of textile after the approval of the annual action plan. The government would have the right to audit the expenditure of the proposed SPV.
There will be two government nominees on the board of holding company. The board of directors of holding company will comprise all the chairmen of EPCs and the post of president of the board will be rotational for two years by taking nominees from AEPC, TEXPROCIL and SRTEPC. The office of the holding company shall be in Apparel House, Gurgaon. The secretary general, AEPC shall be the managing director of the holding company. The holding company shall also raise finances from the contribution of EPCs and EPC members in addition to the government grant per annum.
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