The textile ministry is looking for foreign direct investment worth $6 billion in the sector in the next five years, as against $200 million garnered in 2008. To this end, a trade delegation led by textiles minister Dayanidhi Maran will visit Switzerland, Italy and Turkey next week to woo foreign players into the domestic textile industry.
The ministry had earlier commissioned a survey to identify countries with a potential for investment in India. The study, carried out by Technopak, has identified companies in Germany, Switzerland and France with a potential to invest in garment, apparel and textiles machinery.
The ministry has already completed preliminary talks with 12 foreign companies and the discussions will be taken forward through the trade delegation. The delegates will meet officials of European firms like Beninger, Rieter, Bilsar and Tic AS to seek investment into India.
''We expect to attract 20 per cent of the $6-billion FDI target in the first year (2009-10),'' Maran told reporters in New Delhi on Wednesday. India offers various incentives to foreign investors like low-cost labour and intellectual right protection, he added.
Though India allows 100 per cent FDI in the textiles sector, the inflows were a meagre $200 million in 2008, or 0.6 per cent of the total $33 billion FDI.
The textiles industry, which is the country's second largest employer after agriculture, is expected to reach $110 billion (Rs5,03,380 crore) by 2015, including $45 billion of exports. The ministry expects investments to start pouring in textile machinery, fabric manufacturing, garmenting, manmade fibre and yarn, technical textiles and bringing clothing brands to the domestic market.
According to a ministry official, the Indian textile industry would require an investment of $24 billion by 2015 to maintain a growth rate of 8 per cent. The domestic market can fund $18 billion of this and rest would come from the foreign firms.
The domestic textile industry was severely impacted as exports crashed due to global slowdown in the last fiscal. The ministry has been trying for a deeper penetration in the US and European markets to increase exports. The Technopak survey indicated that firms in Germany and Switzerland were interested in investing in textiles machinery and high-end fabric, while Turkey, Italy and France showed interest in garments and apparels.