The Textiles Committee has also been reconstituted in order to ensure standard quality of textiles both for internal marketing as well as exports. The committee will also establish laboratories and test houses for testing of textiles.

In addition, an online marketing and sales portal has also been launched by the textile minister. The e-marketing platform, developed by the Central Cottage Industries Corporation of India and the Handicraft and Handlooms Export Corporation of India, will host more than 1,000 wide ranging handicrafts and handlooms products. It will also provide online services, such as e-payment facility through major debit/credit card as well as online tracking of the shipment.

Moreover, the Ministry of Textiles is considering setting up textile parks at Vidarbha and Marathwada, the largest cotton growing regions in Maharashtra. Currently seven textile parks are already in various stages of completion in Maharashtra.

Advantage India

India offers cheaper production and marketing costs and enormous opportunities that have tempted Taiwanese companies to work on joint ventures with Indian companies, especially for the manufacture of manmade fabrics. Several European textile and textile machinery manufacturing companies have shown interest in sourcing garments from India. Textile companies were keen to set up base in India due to the cheap labour available here. India offers various incentives like low-cost labour and intellectual right protection to foreign investors. The country allows 100 per cent FDI in the textiles sector.

Investments

According to the Union Minister for Textiles, Mr.  Dayanidhi Maran, around US$ 5.14 billion of foreign investment is expected to be made in India in the textile sector over the next five years.

Growth in Organized Retail Industry: The Indian organized retail industry is estimated at about US$300 billion and is expected to grow to US$ 427 billion in 2010 and US$ 637 billion in 2015. In retail market, India today is the second fastest growing economy of the world after China. Indian market has become the most lucrative market for retail investment in the world. According to Italian Trade Commission, apparel today has the largest share of the modern organized retail in India i.e. 20% of the current market of INR 56,000 Crores and this is expected to grow at a constant rate of 20% over the next 4 years.(Source: Nirmal bang Research)


Warehousing

Indian logistics industry is fragmented, consisting of individual truck owners, small truck-fleet operators and single office logistics providers. In 2007, organised players accounted for only 6% of the total US$ 100 billion Indian logistics industry. (Source: Government of India). The most important logistics functions for Indian companies still are transportation and warehousing. India's logistics services sector is set to witness a rise in private equity (PE) investments on the back of improvement in transportation and low costs.

The country witnessed considerable growth in mergers and acquisitions (M&A) in logistics, ports, warehouses and container freight stations in the last four years. The sectors seen as attractive now include Free Trade Warehousing Zones (FTWZ), freight stations, cold chains and captive spin-offs such as auto and retail logistics.

Logistics sector, with logistics companies on an expansion drive, offers strong free cash flow coupled with low capital expenditure.

According to Manish Saigal, executive director, KPMG Advisory, about 17 small-ticket acquisition deals close to worth US$ 500 million were struck in 2009. He added that a strong bounce back is expected in PE investments in the sector. He also added that the logistics sector will be driven by infrastructure upgrades, with a scope to add container logistics, inland container depots and warehousing.

The sector is set to offer growth opportunities for investors, driven by higher fund allocation in the Union Budget 2010-11 to boost infrastructure in the economy.

Arshiya International, a supply chain and logistics firm, plans to invest US$ 550.3 million to set up five FTWZs across India. Darius Pandol of New Silk Route Partners, which manages US$ 1.4 billion worth of funds, said, “The scope is across the board... all the segments are very attractive. “

An investment of approximately US$ 500 million is being planned by various logistics companies for the development of about 45 million square feet of warehouse space by 2012, along with approximately 110 logistics parks are likely to come up in India by 2013. (Source: Signature Group)

Cold Storage

Cold storages have emerged as critical components of supply chain networks in India.  The rapid evolution of organised retail in India along with the emergence of a large food processing sector has made it essential to have cold storage infrastructure for storage of perishable goods. India is the world's largest producer of fruits, the second largest producer of vegetables after China, and ranks among the leading producers of milk, pulses and a range of cereal crops. The temperature controlled supply chains or cold chains are a significant proportion of the retail food market.  Fast foods, ready meals and frozen products have increased market share in recent years.

Government statistics indicate that India has about 5,400 cold storage facilities with a total capacity of about 24mt. The cold chain logistics business offers US$ 240 million (INR 10 billion) market opportunity in India as organized retail will require cold-chain logistics support and value accretion over the long term.  In spite of the vast natural resources and abundant agricultural produce India ranks below 10th in the export of food products.  Efficient supply chain is critical input for increasing exports.

According to a FICCI study, about 30-35 per cent of the country's 60mt of fruits and vegetables produced get wasted due to inadequacies in cold storage and other facilities. In value terms, food worth Rs 58,000 Crores gets wasted in India, which is more than the total production of fresh fruits and vegetables in the UK.

The CII has estimated that India's cold-chain infrastructure will require at least Rs 18,000-20,000 Crores investment over the next five years to meet the growing requirement of this facility, while the industry size, at the current pace, will grow from Rs 8,000-10,000 Crores to Rs 40,000 Crores by 2015.

 

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