The document discusses various government initiatives, objectives, and targets related to the Indian textile industry. It summarizes the National Textile Policy 2000, the Technology Mission on Cotton, and the Technology Upgradation Fund Scheme, which aims to modernize the industry through financing for new machinery. It also discusses environmental legislation and initiatives to promote cleaner production in the industry.

1. GOVERNMENT INITIATIVES, OBJECTIVES & TARGETS The ITI is a critical part of the Indian economy textiles contributing significantly to the export earning of the country. Technologically backward Cumulative contribution to environment damage environmental problems ground water contamination, hazardous waste disposal, health hazards etc. and clustering around certain common areas in the country like Ahmedabad, Tiruppur, Punjab etc.

2. Globalisation: European purchasing from the textile sector in developing countries like India. Many European companies and governments now use environmental surveys and audits of suppliers compel industry to improve their quality standards and environmental performance. quality and ecofriendliness becoming the password in the global market The Indian government initiated various development activities to help the industry to meet the global challenges.

4. National Textile Policy 2000 (NTxP -2000 Vision To facilitate the textile industry to attain and sustain a pre-eminent global standing in the manufacture and export of clothing To develop a strong and vibrant industry

9. Technology Upgradation Fund Scheme (TUFS) industry suffers from severe technological obsolescence and lack of economies of scale. most important factor inhibiting technology upgradation has been the relatively high cost of macinery Technology Upgradation Fund Scheme (TUFS) for modernisation of the industry.

10. Definition of Technology Upgradation Technology upgradation would ordinarily mean induction of state-of-the-art or near-state-of the- art technology. technology levels are benchmarked in terms of specified machinery for each sector of the textile industry. Machinery with technology levels lower than that specified will not be permitted for funding under the TUFS.

11. The following would be covered under TUFS Cotton ginning and pressing Textile industry covering - Silk reeling and twisting - Wool scouring and combing - Synthetic filament yarn texturing, crimping and twisting - Spinning - Viscose filament yarn - Weaving, knitting including non-wovens, fabric embroidery and technical textiles - Garment / made-up manufacturing - Processing of fibres, yarns, fabrics, garments and made-ups Jute industry Scope of the Scheme

12. GENERAL ELIGIBILITY CONDITIONS * A certificate certifying the residual life of the imported second hand machinery must be furnished to the lending agency A certificate from the textile commissioner will also be necessary to the effect that the equipment is not indigenously available. Existing units can modernise and/or expand with state-of-the art technology New units must set up their entire facilities only with the state-of-the art technology 1.Under the TUFS, generally only new machinery will be permitted. 2. However, in case of the following machinery with a minimum residual life of 10 years, import of second hand machinery by the eligible applicant unit will be permitted Type of Units Type of Textile Machinery Eligible*

13. Type of Textile Machinery Eligible for import Projectile shuttle less loom - Machinery for jute softening and carding, drawing, spinning and weaving. - Autoconer - Rapier shuttle less loom - Worsted card - High speed inter-setting/Gill box/Chain grills/Rotary grills/Vertical grill box. - Drawing set /Roving frames/Roving frames for worsted system. - Ring frames with siro spinning attachment with or without auto duffers for worsted system 3. equipment required for debottlenecking 4. Waste reduction equipment or devices

14. Other Investments Eligible (Max. 25% of total investment) Land & factory building including renovation and electrical installations Energy saving devices Effluent treatment plant Water treatment plant Captive power generation Margin money for working capital Contingency provisions up to 5% of the eligible plant and machinery In-house R&D including designs studio Information technology including Enterprise Resource Planning Total quality management including adoption of appropriate ISO/BIS standards Investment in the acquisition of technical know-how

15. LOANS UNDER THE SCHEME Decided by the lending agency. Minimum of 20% of the cost of the project. May be relaxed under Production Equipment Finance Programme Promoters' Contribution 5-7 years. including moratorium upto 2 years Period of repayment The assistance will be need-based, no maximum or minimum limit for individual loans. Amount of loan 01-04-1999 to 31-03-2004. Loans sanctioned by the lending agency till the last date of the duration of the scheme period Duration of the sceme

16. Rate of interest Interest reimbursement of 5% and/or cover for exchange fluctuation up to 5% per annum will be available during the period of loan as specified in the Letter of Intent or as may be specified in the loan document. In case of subsequent extension of the repayment period, no reimbursement towards interest and/or exchange fluctuation will be available for the extended period. If an account becomes a non-performing asset (NPA), the interest reimbursement would not be available. Period of Interest Reimbursement For Normal FCL, cover for exchange rate fluctuation not exceeding 5% per annum foreign Currency loan 5 percentage points lower than the prevailing commercial rates, which will be reimbursed by MoT Rupee Loan

17. Nodal Agencies above agencies will determine the conformity of a proposal to eligibility norms of TUFS as per the guidelines given in the scheme notified by GoI. In case of doubt, a reference would be made to a Technical Advisory Committee (TAC) being constituted by the MoT, which would meet periodically. IFCI (Industrial Financial Corporation of India) Jute Industry SIDBI (Small Industries Bank of India) Cotton Ginning &Pressing Sector SIDBI (Small Industries Bank of India) SSI Textile Sectors IDBI (Industrial Development Bank of India) Textile Industry (excluding SSI sector) Nodal Agencies Segments

18. Approaching TUFS

19. The scheme aims at the upgradation of ITI. It was introduced keeping in view the huge international market, which is open for the ITI following globalisation and dismantling of quotas in the post-GATT regime. competition is hot, with Korea, Taiwan, China and Pakistan in the race and showing signs of gobbling up a major chunk of the market. To claim its share, ITI needs total modernisation. India has already put up a good show on the garment front by having raised a large volume in exports. But the quality aspects and price realisations have fallen far short of expectations thus raising doubts about future growth. Many importers have already complained at the inconsistencies of quality in the consignments, but have expressed the hope that India has the resilience to put out of it and perform exceedingly well in the years to come. Optimism

20. Technology Mission on Cotton (TMC) This mission started in February 2000 with 4 mini missions to strengthen the raw material base and to improve the productivity and quality of cotton. Mission – I : On cotton research and technology generation. Mission – II : On transfer of technology and development. Mission – III : Improvement of marketing infrastructure. Mission – IV: Modernisation and upgradation of ginning and pressing factories.

21. Budget Allocation @ 244000 Euro per year Contingency for Mini Mission III, IV 4,6 million Euro Mini mission IV 16,9 million Euro Mini mission III 113,5 million Euro Mini Mini mission II 9,8 million Euro Mini mission I

22. Technology Mission on Cotton, Mini Mission & Agencies involved

24. The working of four Mini Missions will be organised jointly by the MoA and the MoT. An empowered committee headed by the cabinet secretary will review and monitor the progress work of the TMC time to time. 26, major varieties/hybrids, account for 80 per cent of the total production, concentration on these varieties/hybrids to give better results in quality and quantity Many farmers are still utilising old techniques and technologies, raising awareness among these farmers is necessary. Organising training programs under mini mission II for these farmers can improve the productivity and quality

25. Environmental Research Promotion Environmental research and development programmes aim at developing strategies, technologies, methodologies, information and data dissemination for better environment management permitting sustainable development.

26. These also seek to develop Infrastructure and trained manpower for undertaking environment research. R&D projects particularly aim at attempting solutions to the problems of resource management and provides necessary inputs for development and formulation of Action Plans for conservation of natural resources, restoration and improvement of environmental quality, permitting sustainable development.

27. The GoI- MoEF supports research in various Universities colleges recognized by University Grants Commission (UGC), institutions of Indian Council of Agricultural Research (ICAR) Council of Scientific and Industrial Research (CSIR), Indian Council of Social and Science Research (ICSSR) recognized non-governmental scientific organizations. The environmental research in the ministry is being supported under various sub-schemes some of them which are directly or indirectly related to ITI are Environmental Research Programme (ERP) Ecosystems Research Scheme (ERS)

28. Environmental Research Programme (ERP) The ERP specifically deals with problems related to waste management, agro-chemicals, waste minimisation, reuse, development of eco-friendly and cleaner technologies, providing scientific inputs and remedies for urgent and critical problems relating to environmental pollution control and management .

29. Environmental Research Programme (ERP) Priority Areas Development of biological and other interventions for pollution prevention and control including waste recycling Development of strategies/technologies for prevention and/or control of pollution including air and water pollution, municipal waste treatment, disposal & reduction technologies Development of clean technologies for sustainable production patterns Development of instruments for air and water pollution control

30. Priority Areas Development of eco-friendly alternatives Health and toxicology studies due to, food radiation, heavy metals and other pollutants through various media i.e. air, water Research on landuse and landuse changes including study of chemical pollution of soil Monitoring and management of hazardous substances including biodegradation of micropollutants ( pesticides, heavy metals, detergents, oils). Impact of developmental activities on drinking water resources including ground water pollution monitoring and modelling Research on Environmental Legislation/Socio-economic issues

31. Ecosystem Research Scheme (ERS) The ERS is an inter disciplinary programme of research on inter relationship between human being and the environment The primary objectives are to develop strategies, technologies and methodologies for better environment management create infrastructure and a pool of trained manpower to shoulder the responsibility of environmental management in the country. seeks to generate scientific knowledge needed to manage the natural resources wisely. Grants are provided to various scientific organisations and reputed non- governmental organisations (NGOs) to conduct research on issues of environmental relevance. solutions to the practical problems of resource management , conservation of natural resources restoration and improvement of environmental quality.

32. Past environment was related only to human health , Present Additional factor rising relation with trade Direct effect on export earnings. There is a growing shift towards the environment financing in the country in the form of national and International funding

33. International Support The Ministry of Environment and Forests functions as a nodal agency for United Nations Environment Programme (UNEP), South Asia Co-operation Environment Programme (SACEP), International Centre for Integrated Mountain and Development (ICIMOD), International Union for Conservation of Nature and Natural Resources (IUCN) and Various international agencies, regional bodies and multilateral institutions.

34. International Treaties/Agreements India is signatory to some important international treaties/ agreements in the field of environment: Vienna convention for the protection of the ozone layer Convention on migratory species Basel convention on transboundary movement of hazardous substances Framework convention on climate change Convention on conservation of biodiversity

35. International Treaties/Agreements Montreal protocol on the substances that deplete the ozone layer International plant protection convention Convention on international trade in endangered species of wild flora and fauna International convention for combating desertification

36. International co-operation The MoEF and its agencies co-operate on bilateral basis with various countries such as Sweden, Netherlands, Norway, Denmark, Australia, U.K., U.S.A., Canada, Japan, etc., several UN and other multilateral agencies such as UNDP, World Bank, Asian Development Bank, Overseas Economic Corporation Fund (Japan) Overseas Development Administration (U.K.)

37. Montreal Protocol The Montreal Protocol under its article 10 has the provision to provide financial assistance to the developing countries. A multilateral fund has been set up in 1992. Developed countries replenish the fund by their annual contribution. This may continue till 2010 .

38. Institutions Promoting Cleaner Production The UNEP (United Nations environment Programme) financial institutions initiative on the Environment was founded in 1992 The Statement by Banks on the “ Environment and Sustainable Development" was signed by 30 banks following the Earth Summit in Rio. By the end of 2000 more than 170 financial institutions were signatories.

39. The initiative promotes the integration of environmental considerations into all aspects of the financial sector’s operations and services through building awareness, dialogue understanding To foster private sector investment in environmentally sound technologies and services.

40. UNEP is now implementing a four-year project "Strategies and mechanisms for promoting CP (Cleaner Production) investments in developing countries". The project will demonstrate how to stimulated financial institutions to understand the importance of CP and helping CP experts and entrepreneurs to develop creditworthy investment proposals.

41. Within the framework of the project, a survey was carried out in 2000 to collect data on various stakeholders involved in promoting CP financing. The survey revealed that new initiatives are emerging, particularly in governmental or semi-governmental institutions. Financial institutions lag behind. Very few commercial banks perceive a CP strategy adopted by a loan applicant as a favourable criterion for approving funds Most financial flows towards CP investments still originate from special credit lines or Revolving funds set up by multilateral or bilateral development finance institutions for selected countries or regions.

42. International Finance Corporation (IFC) Environment Division 2121 Pennsylvania Avenue Washington, D.C. 20433 UNITED STATES Tel.: +1 202 4730661 Fax: +1 202 9744348 E-mail: ifcpu@ifc.org Internet: www.ifc.org

43. IFC is the World Bank Group affiliate that provides debt and equity financing exclusively to private sector projects in developing countries. IFC welcomes proposals for commercially viable Cleaner Production projects from private sponsors. The benefits of Cleaner Production are presented in the World Bank Group Pollution Prevention and Abatement Handbook, IFC sponsors several private investment funds that may also finance Cleaner Production projects.

44. World Bank (WB) Program Team Leader for Urban, Industry and Energy 1818 H Street, N.W. Washington, D.C. 20433 UNITED STATES Tel.: +1 202 4585686 Fax: +1 202 4770565 E-mail: Dhanrahan@worldbank.org Internet: www.worldbank.org

45. The World Bank Group promotes Cleaner Production approaches, as evidenced by the Pollution Prevention and Abatement Handbook Cleaner Production. Cleaner Production approaches have been included in technical assistance to several countries, particularly in Latin America and in Asia. Where the Bank supports environmental funds or other mechanisms for pollution reduction, implementation of Cleaner Production is usually one of the criteria for eligibility. In some circumstances, Cleaner Production is also seen as a useful tool in helping to increase efficiency and productivity in SMEs.

46. European Investment Bank (EIB) Head of Environmental Co-ordination 100 Boulevard Konrad Adenauer Luxembourg-Kirchberg L-2950 LUXEMBOURG Tel.: +352 4379 2769 Fax: +352 4379 2860 E-mail: p.carter@eib.org Internet: www.eib.org

47. The European Investment Bank is the European Union’s long term financing institution established in 1958 to further European integration. The EIB actively supports Cleaner Production financing, mainly through the provision of long term loans. Notably in association with the EIF (European Investment Fund), Venture capital is provided to SMEs, Sometimes for Cleaner Production activities. Outside the EU, the bank applies both loan finance and risk capital for investment purposes, occasionally funds are made available for technical assistance, mainly studies.

48. Asian Development Bank (ADB) P.O. Box 789, 0980 Manila PHILIPPINES Tel.: +632 632444 Fax: +632 6362444 E-mail: wevans@adb.org Internet: www.adb.org Regional Environmental Technical Assistance (RETA) project for the Promotion of Cleaner Production Policies and Practices in Selected Member Countries

49. Kreditanstalt für Wiederaufbau (KfW) Palmengartenstrasse 5-9 60325 Frankfurt a.M GERMANY Tel.: +49 69 7431 3142 Internet: www.kfw.de/e_kfw/e_index.html KfW is Germany’s promotional bank for developing countries. The bank is owned by the German federation The KfW will co-finance Cleaner Production investments under the framework of the German bilateral development assistance in India.

50. Japan Bank for International Cooperation (JBIC) Director, Environmental Division 4-1, Ohtemachi 1-Chome Chiyoda-Ku, Tokyo JAPAN Tel.: +81 3 5218 3903 Fax: +81 3 5218 3980 E-mail: [email_address] Internet: www.jbic.go.jp the bank provides loans for preventing industrial pollution in developing countries, e.g., small scale industry (SSI)

51. Netherlands Development Finance Company (FMO) Environmental Unit P.O. Box 93060 2509 AB The Hague NETHERLANDS Tel.: +31 70 314 9734 Fax: +31 70 314 9764 E-mail: b.hamelynck@fmo.nl Internet: www.fmo.nl The Netherlands Development Finance Company is involved in Cleaner Production financing promotion activities (training) and Cleaner Production financing activities (long-term loans). Activities in 77 countries in Africa, Asia, Latin America and Central & Eastern Europe headquarters in the Hague .

52. CDC Capital Partners Environment Specialist One Bessborough Gardens London SW1V 2JQ UNITED KINGDOM Tel.: +44 20 7963 3872 Fax: +44 20 7963 3943 E-mail: dallwood@cdcgroup.com Internet: www.cdcgroup.com CDC Capital Partners have over 30 offices world-wide located in Latin America, Caribbean, sub-Saharan Africa, South Asia, South East Asia, East Asia and Pacific Islands. They provide Cleaner Production business consulting, policy advice and training activities in addition to equity based investment.

53. Organisation for Economic Cooperation and Development (OECD) Coordinator (Environmental Management in Enterprises) 2, rue André-Pascal, 75775 Paris Cedex FRANCE Tel.: +33 1 4524 1385 Fax: +33 1 4524 9671 E-mail: peter.borkey@oecd.org Internet: www.oecd.org/env The OECD is involved in several Cleaner Production financing promotion activities, e.g., policy advice, monitoring and analysis of Cleaner Production activities establishing a network of Cleaner Production centres

54. U.S. Agency for International Development (USAID) Urban/Industrial Manager Ronald Reagan Building, 1300 Pennsylvania NW Room 2239 N.S., LAC/RSD/E, Washington, D.C. 20523-0025 UNITED STATES Tel.: +1 202 712 1219 Fax: +1 202 216 3262 E-mail: [email_address] , Internet: www.info.usaid.gov USAID is involved in both Cleaner Production financing promotion activities (business consulting, policy advice, research and publications on Cleaner Production investment, training , Funding for and designing of centres for Cleaner Production) and Cleaner Production financing activities. USAID and the Environmental Export Council (EEC) have been working with five industry associations in Bolivia, Ecuador and Peru

55. Tata Energy Research Institute (TERI) Research Associate Habitat Place, Lodhi Road New Delhi – 110003 INDIA Tel.: +91 11 4622 246 Fax: +91 11 4621 770 E-mail: [email_address] Internet: www.teriin.org TERI is active in Cleaner Production financing promoting (business consulting, policy advice, research on Cleaner Production investment, publications on Cleaner Production investment, demonstration projects).

56. The World Conservation Unit (IUCN) Environmental Economist 28 Rue Mauverney 1196 Gland - SWITZERLAND Tel.: +41 22 9990 273 Fax: +41 22 9990 025 E-mail: fwv@iucn.org IUCN’s headquarters are located in Switzerland offices in over 40 countries are co-ordinated. The institution’s Cleaner Production financing promoting activities are mainly focused on issues related to bio-diversity. Internet: www.economis.iucn.org (or) www.iucn.org

57. Environment services growing concern for environment protection world-wide. The world market for environmental services is increasing at a tremendous speed, As the environmental services in Europe are getting saturated, the bulk of opportunities are left in the emerging Asian economies particularly in India.

58. many financial institutions coming forward to invest under cleaner production, the possibilities of implementing various projects for the betterment of environment are also increasing. This potential support has increased post WTO formation as the relation between trade and environment has become vital.

59. Clean Technology Initiative (CTI) CTI is an United States Agency for International Development (USAID) project emphasizing private voluntary initiatives to promote cleaner, climate friendly technologies and improve environmental management practices. CTI, a program of USAID in collaboration with ICICI Limited, offers financial and technical assistance to Indian industry in selected sectors in which ITI is one of them. CTI promotes industrial voluntary initiatives for the adoption of clean, climate-friendly technologies and certifiable environmental management systems (ISO 14001). CTI draws on the expertise of American and Indian experts led by Tetra Tech a leading U.S. environmental engineering and consulting firm specializing in pollution abatement and environmental protection.

60. CTI aims to sustainable increase environmental protection enhancing industrial productivity and competitiveness. CTI is accelerating the adoption of cleaner technologies in the sectors like ITI by providing them with targeted technical and financial assistance.

61. CTI- USAID, Types of Assistance

62. CTI- USAID, Types of Assistance

63. Trade in Environmental Services and Technologies project (TEST) The on going new phase of USAID Trade in Environmental Services and Technologies project (TEST) helps Indian industries adopt environmental sound practices. The project is currently implementing a clean technology initiative to strengthen incentives for the voluntary adoption of environmental management systems (ISO 14000/01, benchmarking, greening the supply chain management) by the industry

64. The effort is focused primarily on selected, rapidly growing and major polluting industrial sectors (including textiles and chemicals). The program also provides financial support for the demonstration of environment-friendly clean technologies and outreach and awareness activities with industry participation. The projects provides a total assistance of € 33 million ($ 29,9 million) for a period of ten years (Sept 1992- Sept 2002), which accounts about € 3 million per year for all sectors, which is very less for the country like India with its huge and varying sectors. The initiatives have to be carried out from cradle to grave.

65. Such an initiative could also be provided by the EU, who is lagging behind even though being a world leaders in environment protection. The market entry of the EU members will not only benefit the ITI, but also provide competitive and economic advantages for EU companies.

66. Indian Textile Industry interest ITI has to meet the environment challenges for its survival Possible only the technology upgradation Denial of upgradation will perish the industry with adverse effects on employment opportunities Export earning National economy

67. GOI Schemes GoI is running many schemes bringing new policies for the well being of the sector under domestic and global markets.

68. Private sector Initiatives Some private companies had already adapted themselves to the requirements of the market orientation. Some new success had been seen through the Green Supply Chain Management (GSCM) under the USAID initiatives. Some are putting efforts by themselves through joint ventures, raising funds through shares etc which are utilised for restructuring/reengineering of textile industry There is a growing interest in bringing initiatives into action, but the hindrance in technology, management, orientation of market is hampering the sustainable growth of the textile sector.

69. Summary There is a potential support by GoI targeting Textile and apparel exports to € 55 billion by 2010. With this foresight GoI has earmarked for implementing vigorously TUFS and TMC under its NTxP 2000. There is a tremendous support and encouragement from government for the private sector, institutions, R&D etc., for restructuring the ITI as an environment friendly and internationally competitive sector.

70. The MoEF and its agencies, are signatories to many environment related treaties has agreed to comply with the commitments. Under this effort it is striving hard by bringing into action new schemes and policies. Its activities are also backed up by many international organisations by supporting it with policy advice and financial assistance. The government has also acquired a good image in the international scenario

71. The growing awareness of environment protection worldwide. many international investing institutions started investing under CP. there is a prediction that many institutions are expected to queue up to finance CP, due to its growing importance under trade.

72. The relation between trade and environment left many ITIs helpless as the nation lack in CP technologies. ITI is a livelihood of many , neither GoI nor private sectors can deny its need for upgradation and modernisation. The Government of India is committed to providing a conducive environment to enable the ITI to realise its full potential, to achieve global excellence, and to fulfil its obligation to different sections of the society. There is considerable pressure from international markets for environemnt protection ITI no other way but to develop a “Green Image” by promoting environment-friendly products.

73. Indian Environmental Market India’s environmental problems are gaining global significance because of rapid population growth Aggressive speed of urbanisation lack of infrastructure. tremendous pressure on the natural resources need to strike a balance between the economic development and the urgency to safeguard the environment industrial pollution is main cause of declining water, air, and land quality health impact on human beings and aquatic life

74. SSI and Environment India is responding to calls for environmental improvements with stricter laws, court actions, programs and initiatives aimed at raising environmental spending. Compliance among the estimated three million small-scale industrial units is still extremely low (Total industrial sector including ITI) Small-scale industries account for over 40% of industrial output in value terms, but their share of industrial pollution is disproportionately high. The majority of these units belongs to the decentralized sector and is thus difficult to regulate

75. While several large forward-thinking enterprises go for adopting integrated environmental management policies, most domestic industries are generally hard-pressed to go beyond basic compliance. Constraints Shortage of capital Limited access to technology Underdeveloped infrastructure Limited research and development capability for technology improvement Lack of awareness of the options for pollution control and prevention

76. References http://www.ucciudaipur.com/articles/article8.htm http://www.texmin.nic.in/ms_12162000.htm http://www.virtualbangalore.com/business/kum/annex3.htm http://www.indiainfoline.com/sect/dyes/ch02.html http://www.indiainfoline.com/sect/dyes/ch05.html http://www.indiainfoline.com/sect/dyes/ch07.html http://www.indiainfoline.com/sect/ters/db00.html http://www.indiainfoline.com/sect/teot/db00.html http://www.indiainfoline.com/sect/ters/cont.html http://www.bharattextile.com/index2.html http://www.pdexcil.org/tab1.htm Indian Textile Industry and Environmental Issues: A report from Indo-German Chamber of Commerce, Mumbai, India