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Apparel Park

Apparel Park

Apparel Park

Considering the stable demand for Indian-made textiles, the central government launched the Apparel Park for Exports scheme. It provides financial assistance to set up apparel parks that house textile manufacturing units. The focus is on making high-quality textiles that are sought after in the international market. The aim is to create a niche in foreign markets for apparel made in India.

Objectives of the Scheme

Major objectives of the apparel parks for exports are listed below:

  • To improve the quality of our apparel to meet the international standards
  • To create and sustain a demand for India-made clothes in markets abroad
  • To increase the share of exports in the apparel sector and make it more competent
  • To encourage state governments to contribute more investments

Implementation Strategy

The Apparel Parks for Exports programme is centrally sponsored, but the implementation is to be done by respective state governments. The state governments have the following responsibilities:

  • Provide land at an appropriate location for setting up the park. This is to be done free of cost. Stamp fee may be exempt for transfer of allotted land. The state government may choose to delegate this task to any agency of its choice.
  • Basic facilities such as electricity, water supply, telecommunication, drainage or sewerage, and roads will also be provided by an authority designated by the state government.
  • State government must ensure that labour laws applicable to the park are flexible so as to facilitate operations.

Salient Features

Important aspects of the apparel parks for export are as follows:

  • Generally, the size of each park is about 150-250 acres, but the final size is determined on a case-by-case basis
  • The location of the apparel park should ideally be close to transportation hubs like ports, railway lines or airports. In any case, the park must be well connected and have easy access to such hubs.
  • Uninterrupted supply of raw material and basic infrastructure facilities near the location would be favourable.
  • The park will accommodate state-of-the-art apparel manufacturing units, each with a minimum of 200 sewing machines. More emphasis is laid on integrated production units that contain facilities for making ancillary products like buttons, etc.
  • To encourage value addition, washing or other processing units can also be established.
  • To facilitate exports, custom clearance houses, cargo complexes, banking services focussing on foreign exchange may also be set up.
  • Effluent treatment plants must be set up to meet environmental standards put in place by both central and state governments.
  • Other facilities such as crèches, meeting rooms, exhibition spaces, display areas, multi-purpose hall and marketing centres may also be set up.
  • Each apparel park envisions direct and indirect employment of about 20000 people. Existing skill upgradation programmes of the central government may be used to train the workers of the park.

Eligibility Criteria

Following entities may submit proposals to set up apparel parks for exports:

Financial Support

The quantum of assistance available for apparel parks for exports is listed in the table below:

Component/Facility

Assistance Available

Capital expenditure

75% of the amount as a grant from central govt, capped at Rs.10 Crores

25% of the amount from the designated state agency

Ancillary facilities to meet labour/social/environmental standardsMaximum of Rs.5 Crores
Training centre within the park50% of the cost as a grant from central govt, capped at Rs.2 Crores

General Process to Avail Assistance

The process flow involved in availing monetary support for establishing apparel parks for export is as follows:

Step-1: Submission of the project proposal to the Project Approval Committee (PAC) along with relevant documents by the applying entity, subject to the satisfaction of eligibility criteria.

Step-2: Evaluation of the project proposal and necessary assessments by the PAC based on parameters such as:

  • Potential to attract investments in the future
  • Generation of employment opportunities
  • Efficient production and high productivity
  • Capacity to export

Step-3: Approval and sanctioning of apparel park; allotment of land, after ensuring availability of necessary infrastructure, by the state government.

Step-4: Selection of units to be housed in the parks based on the discretion of state government.

Step-5: Timely monitoring of apparel park operations by State Level Committee (SLC) and reporting to the central government. SLC may meet once every quarter for review.

Step-6: The release of funds in phases by the central government based on the progress of the park as reported by the state government. Funds will be routed through SLC; submission of statement of expenditure and utilisation of certificate.

Formulation of Project Proposal

Factors to be considered before formulating a project proposal of Apparel Park for exports:

  • Choice of location must be based on connectivity, access to inputs and pre-existing infrastructure facilities. It is recommended that the land must be owned by either the state government or the designated agency.
  • The implementing agency for the park must be in place before submission of the proposal. It must have proved experience in the relevant field.
  • Clear layout of plans, both physical and commercial, for the park, must be included. It must indicate:
    • Investments
    • Employment opportunities
    • Environmental impact
    • Estimated production
    • Facilities within the park
  • Time frame for completion of different phases of the park.
  • Cost estimates for various components of the project and detailed financial plan to meet the same.
  • Periodical maintenance plan and costs to implement the same.
  • Self-sufficiency of the apparel park in the long term.
  • Detailed Project Report (DPR), Socio-economic feasibility report and business development plan must be submitted along with the proposal.

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