With a host of textile companies flocking to Rajasthan, the desert state might just become India's next apparel manufacturing hub.
The Rajasthan State Industrial Development & Investment Corporation (RIICO) is going all out to woo textile firms to set up shop at its proposed garment zone in Bhilwara. Nearly a 100 apparel companies have applied for space at garment zone where the state government is expected to sanction about 300 acres.
Incentives apart, apparel companies are also attracted by Rajasthan's cheap labour. Orient Craft is developing a 30 acre plot at Bhilwara and plans to shift its existing manufacturing units from Noida.
Says Sudhir Dhingra, CMD, "Textile is a labour intensive sector. The wages in Haryana and Delhi have shot up from Rs 2,000 per month to Rs 3,500. Rajasthan is an alternative option as land is available at concessional rates and labour is cheap."
Adds Rishi Vij, CFO, House of Pearl Fashion, "It is a viable option as Bhilwara is strategically located, not far away from Gurgaon.Rising real estate costs are making it difficult for the garment industry to sustain themselves in Gurgaon." Vij says that currently the company is awaiting land allotment from Rajasthan.
RIICO, the Rajasthan government's nodal agency for developing land for industrial enterprises, is promoting two garment zones in the Bhilwara region. It has already allotted a part of the land for the first zone covering 80 acres. Says Anil Sharma, Senior DGM, RIICO, "We have acquired an additional 1,000 acres and will finalise the allotments soon.
Sharma won't comment on the investments expected but observes that Orient Craft, the anchor in the first zone, will be investing Rs 90 crore (Rs 900 million). "The industry is looking for additional support like training and housing facilities for the workers," he says. Bhilwara has emerged as one of the biggest and central markets for viscose and synthetic textiles.
Sangam Group, the Bhilwara-based textile conglomerate, will soon complete its Rs 707 crore (Rs 7.07 billion) expansion plan in the region. L L Soni, VP, points out that Bhilwara is developing as a central manufacturing base due to the availability of skilled labour, proximity to other manufacturing centres and the state government's supportive investment policy. He believes the Rajasthan government's special scheme of offering 50 per cent exemption on sales tax is attracting big ticket investment in excess of Rs 200 crore (Rs 2 billion).