Foreign Direct Investments (FDI) in Clothing & Apparel Industries in India-1: Lawyers Advice on Foreign Investments in India | Law Firm for Foreign Investments in India | FDI Attorney in India | India Business Entry | Legal Advice for Foreign Investors in India
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Entering Indian Market:
• Indian textile and apparel industry is one of the largest in the world with US$ 38 billion of export and US$ 50 billion of domestic textile. India has the most liberal and transparent FDI policy amongst the developing countries, making it can ideal destination for investment in textile industry.
• FDI Policy in India allows 100% FDI in the textile industry through the automatic route requiring no prior approval of the Government or the Reserve Bank of India.
• The investors are however, required to notify the RBI regional office within a period of 30 days from the receipt of inward remittance.
Best Locations:
• Maharashtra (Mumbai, Solapur, Jalgaon)
• Punjab (Amritsar, Ludhiana)
• Gujrat (Surat, Ahmadabad, Vadodara, Rajkot)
• Uttar Pradesh (Kanpur, Agra, Meerut)
Achievements made by Indian Corporations or in India:
• I-ATUFS: It is a web-based tacking mechanism that monitors claims and was introduced by Government to ensure efficient working of textile industry.
• Government has sanctioned 381 new block level clusters for textile.
• 59 new textile parks were sanctioned, under the Scheme for Integrated Textile Parks (SITP)
• India has seen an increase in Employment in textile industry from 8.03 million in Financial Year 15 to 45 million in Financial Year 19.
Demand in the Market:
• There is a high demand for premium and branded products in the country due to rise in the disposable income of the people.
• Further, there is also a high demand for the textile produced in India which can be seen through the increasing number of cloths and apparel being exported to various countries.
Existing Notable Players in the Indian Market-Domestic & Foreign:
• Bombay Dyeing and Manufacturing Company Ltd
• Raymond Ltd
• Arvind Ltd.
• Zara
• Marks and Spenders Group Plc
• Louis Philippe
Company Registrations, Compliances, Licenses & Permits which are to be procured:
• Registration of business with the Registrar of the Companies.
• Udyog Aadhaar MSME registration for a Microenterprise, the investment in plant and machinery should not exceed Rs. 25 lakhs; for a Small enterprise the investment needs to be between Rs. 25 lakhs and 5 crores; for a Medium scale enterprise the investment should be in the range of Rs. 5 crores and Rs. 10 crores.
• GST registration to obtain the GTIN. It is a mandatory registration for all business entities that have an annual turnover of more than Rs. 20 lakh per annum and who are indulged in activity involving inter-state movement and e-commerce activities.
• Pollution License issued by the State Pollution Control Board.
• Factory License for registering the entity premise with the local authority pertaining to implementing safety and health management system in the premises and taking care of risk management factors.
Precautionary Measures:
• Work Environment: The work environment in textile industry is prone to dust, the total dust and fiber dust are two aspects. The dusty sections of the mill are the Mixing, Blow room, Combing, Ring frame and some extent winding section. As per Factories Act and ACGIH, the prescribed maximum permissible exposure limit of total dust is 1 mg/m3 and for cotton fibers dust is 0.2 mg/m for eight hours work. A few aftermath of inhalation of cotton dust are chest tightness, breathlessness and the alike known as BYSSINOSIS, which is a notifiable disease under factories act. This calls for measures such as pre-employment and periodical medical examination in order to ensure the well- being of the factory workers.
• Fire Hazard: The presence of combustible and flammable materials in large quantity is there in all sections of textile industry hence any source of ignition can put whole unit at uncontrolled fire. Therefore, the factory should use naked flames for soldering or welding on shop floor only under permit and supervision. Further, the electrical panels, switchboards and other electrical equipment’s are also accumulated with dust and needs attention, wherever needed those should be flameproof. Also, it is desirable to store freshly dyed fabrics in isolation as they could ignite due to spontaneous ignition.
Authored By: Adv. Anant Sharma