Incubation Centers for Apparel Manufacturing


Incubation Centers for Apparel Manufacturing

The textile industry is India plays a major role as one of the largest contributor to Indian GDP, foreign exchange earning and employment generation. The size of the Indian apparel market is estimated to be USD45 Billion and is expected to grow to USD200 Billion by 2025. Further, the textile industry in India currently employes about 35 million workers and it is said that for every 1 lakh invested in the apparel industry, 7 additional jobs are created. Therefore, to strengthen the Indian Textile and Apparel Industry, the Government of India has introduced the concept of Incubation Centers for Apparel Manufacturing in the 12th plan period. In this article, we look at the scheme for Incubation Centers in Apparel Manufacturing in detail.

Objective of the Scheme

First generation entrepreneurs and startups in the apparel industry face a number of challenges such as lack of capital for investment in land, buildings and machinery, limited access to funding, competition from established players and operational inefficiencies due to lack of experience and expertise. Therefore, there must be a mechanism for the creation of a holistic ecosystem for promoting entrepreneurship in apparel manufacturing that would would address the above constraints and help Entrepreneurs setup successful apparel manufacturing businesses.
The scheme for incubation centers in apparel manufacturing addresses these difficulties by creating an integrated workspace and entrepreneurial ecosystem for startups in the apparel industry. This eco-system would increase the chance of success of startups and decrease the time and costs required to start a business. Successful apparel businesses incubated in these incubation centers would thus:

  • Promote entrepreneurship in apparel manufacturing
  • Create additional manufacturing capacity
  • Generate additional employment opportunities

Setting Up Incubation Centers for Apparel Manufacturing

The scheme aims to establish these incubation centers in textile parks, with each incubation center having a maximum of three incubatees. The incubation centers for apparel manufacturing can be setup by the following entities or institutions (Implementing Agency):

  • Groups of Entrepreneurs;
  • Industry Associations;
  • Developers of SEZs;
  • Textile Parks promoted by State Governments
  • State Industrial Development Corporations
  • SPVs promoted by the Ministry of Textiles

Assistance to Implementing Agency for Setting up Incubation Centers

The scheme requires for the land for the Incubation Center to be provided by the Implementing Agency. Subsidy is provided under the scheme for the following infrastructure support provided by the Implementing Agency:

  • Factory Building: Ready to use plug & play factory building with a total built-up area not exceeding 45000 square feet @ 15,000 square feet per incubatee. The factory building must contain the operations area, packing, office, store, workers amenities, display, etc.,
  • Plant & Machinery: 100 stitching machines with ancillary machinery per incubatee.

The scheme provides 100% grant in aid for the implementing agency providing infrastructure support. The amount of assistance must not exceed Rs.4 crores per incubatee and Rs.12 crores per Incubation Center.
Role of Implementing Agency establishing the Incubation Center for Apparel Manufacturing:

  1. Conceptualise, formulate and prepare the detailed project report;
  2. Provide land for the incubation center;
  3. Identify, screen and select the incubatees through a fair and transparent selection process on the basis of their business plan;
  4. Obtain and maintain all statutory approvals;
  5. Create and maintain the incubation center with financial assistance from the Ministry of Textiles;
  6. Operate the incubation facility through collection of rentals and other user charges to ensure sustainability;
  7. Assist the incubatee in obtaining financial support, if required;

Assistance to Entrepreneurs in the Incubation Center

The scheme envisages that the Incubatees will be individuals of the following categories:

  • Degree or Diploma holders of any disciple related to textile, apparel, fashion design, etc.,
  • First generation entrepreneurs

The scheme provides the following financial assistance to each of the incubatee towards capacity building.
Skill Development for Workers: The scheme provides Rs.20 lakhs per incubatee towards training of 200 workers. The training should be carried out for 3 months in accordance with the norms prescribed by the Integrated Skills Development Scheme of the Ministry of Textiles.
Domestic & International Fair Participation: The scheme provides Rs.5 lakh per incubatee for visit to 3 domestic exhibitions on textile industry and 1 international fair participation.
Product Design & Development: The scheme provides Rs.5 lakh per incubatee towards training on product design and development.
Entrepreneurship Development: The scheme provides Rs.1 lakh per incubatee towards training on entrepreneurship development.
Hence, the scheme for Incubation Center for Apparel Manufacturing provides Rs.31 lakh in financial assistance for each of the Entrepreneur in the Incubation Center.
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