Garment Manufacturing Opportunities in Madhya Pradesh Jun2019

Garment Manufacturing Opportunities in Madhya Pradesh

Madhya Pradesh, the second largest state in the country, has the potential to be a big hub for readymade garments manufacturing. The state’s pool of human resource, investment incentives & infrastructure make it extremely competitive for garment projects.

Located in Central India is the state of Madhya Pradesh. The state economy has grown at an astounding CAGR of 14.39% between FY12-FY18 to reach US$ 110 billion in FY17-18.

The state contributes 4% to the total cotton production in the country, making it the fifth largest state to produce cotton. Several large textile and garment manufacturing companies such as Grasim Industries, Maral Overseas, Pratibha Syntex, Nahar Industries, Raymond, SEL Group, Spentex Industries, Trident Group and Vardhman Textiles have large manufacturing units in different districts of the state. Apart from these, there are several other small and medium players scattered across various clusters.

With good availability of yarn and fabric, the readymade garment industry comes as the next natural choice for new investments. In the view of the high employment generation potential, the State government has declared special financial incentives for large scale garment manufacturing units (wherein investment in Plant and Machinery is more than Rs. 10 crores). Under ‘Special Financial Assistance for Large Scale Units under Garment Manufacturing Sector’ a garment factory can claim up to 200% of its investment in plant & machinery, buildings and shed (excl. residential buildings). The various options available to claim the incentives are tabulated below.

The state has a highly developed infrastructure which includes 19 industrial development park, 129 industrial areas and 3 apparel parks. These apparel parks are available for allocation in Gwalior, Jabalpur and Indore. Indore alone has more than 1,200 garment manufacturing units and houses the biggest garment manufacturer in the state, Pratibha Syntex. Apart from these, four more apparel parks were announced in December 2019, which will be built in the districts of Chhindwara, Dhar, Ratlam and Bhopal.

While Gwalior, Indore, Bhopal and Jabalpur can be recognised as key business centres, other districts such as Chhindwara and Dhar, which have predominantly tribal population, can be given special focus in terms of vocational training and social development. In Madhya Pradesh, the availability of working age population (the 15-59 age group) population, is estimated to grow from 43.4 million in 2012 to 52.8 million by 2022. The role of women in capacity building cannot be undermined as some districts like Ratlam and Chhindwara.

The availability of raw materials can be fulfilled from within the state, as well as from neighbouring states such as Maharashtra and Gujarat. Joining this with the available manpower to convert it into finished products, the next step would be to look at the ease and cost effectiveness of getting the goods out of the facilities, to the buyers and retailers.

Madhya Pradesh has an advantageous geographical location, as the intersection of the East-West and North-South corridor falls in this state. This land-locked state, allows for the manufacturing units to have the ability to transport through a dense road and railway network. There are convenient connections to the Kandla Port and Jawaharlal Nehru Port as well as several Inland Container Depot. Major airports in the state are Indore, Bhopal, Gwalior and Jabalpur, which now have connectivity to major cities such as Delhi, Mumbai and Bangalore and have excellent cargo capacity.

Madhya Pradesh, because of aforementioned reasons can prove to be a strong lead in this sector. Its competency in terms of manpower availability, infrastructure, connectivity along with the added advantage of policy support, can be some benefits potential investors look at while investing. It is hence, expected that some new garment factory setups will come in Madhya Pradesh by established or new players.

However, in today’s increasingly competitive industry, investments alone do not guarantee success. The ingredients of success of a clothing factory is a balanced blend of organization, infrastructure, technology and processes. To help investors achieve this balance, Wazir Advisors has launched WASTRA (Wazir Apparel Start-up and Re-Engineering Assistance) to offer turnkey solutions for establishing an Engineered Garment Factory setup. Wastra has a team of garment factory consultants who help turn garment business plan into a reality and provide assistance for answering all queries related to how to start garment factory.

This article has been authored by Varun Vaid, Associate Director and Aradhika Sachdeva, Research Analyst.