Silk Map of India

Silk in the Indian subcontinent is a luxury good that carries a long history. Archaeological discoveries in Harappa and Chanhudaro hint towards sericulture present during the time of the Indus Valley Civilization (dating between 2450 BC and 2000 BC). However, certain evidences found for silk production in China dates to around 2570 BC.

Let’s have a look at the Silk map of India, but before that,

Some Quick Facts:

  • India is the second largest producer and the largest consumer of silk in the world after China.
  • About 97% of the raw mulberry silk comes from six Indian states, namely, Andhra Pradesh, Karnataka, Jammu and Kashmir, Tamil Nadu, Bihar and West Bengal.
  • Mysore and North Bangalore are the upcoming sites of a $20 million Silk City.
  • Emerging silk producing districts in Tamil Nadu are Salem, Erode and Dharmapuri.
  • Hyderabad, Andhra Pradesh, and Gobichettipalayam, Tamil Nadu, were the first locations to have automated silk reeling units in India.

Silk Map

How to get MSME Certificate in India?

Micro-Small & Medium Enterprises (MSMEs) have a major contribution in the socio-economic development of India. MSME registration for both manufacturing and service enterprises is highly important since it allows SMEs to avail benefits from various government initiated schemes.

Changed Definitions of MSMEs

In October 2019, Union Minister Nitin Gadkari revised the definition of micro, small, and medium enterprises to grant a unified description for everything related to taxation, investment, etc. This was implemented to refine the operational scenarios for Indian enterprises. It led to change of the classification criterion for MSMEs to investment in plant and machinery.

On 13th May 2020, Finance Minister Nirmala Sitharaman added the additional criterion of turnover along with the investment. This definition was announced under the Atmanirbhar Bharat Abhiyaan to faciliate MSMEs to grow in size and help them deal with the difficulties levied upon by the pandemic.

As per this, there won’t be any distinction between manufacturing and services sector MSMEs, and  will cover:

– Micro units with investment up to ₹1 crore and turnover up to ₹5 crore

– Small units with investment up to ₹10 crore and turnover up to ₹50 crore

– Medium units with investment up to ₹20 crore and turnover up to ₹100 crore

The definition, however, further got revised on June 1, 2020 on representations that the revision is still not in tune with the market and pricing conditions, and should be further revised upwards. As per the revised definition, it will be ₹50 crore of investment and ₹250 crore of turnover.

This step will help attract investments and create more jobs in the MSME sector. The following table provides the details of revised limits:

CategoryOld CapitalOld TurnoverNew CapitalNew Turnover
Micro₹25 Lakh₹10 Lakh₹1 Crore₹5 Crore
Small₹5 Crore₹2 Crore₹10 Crore₹50 Crore
Medium₹10 Crore₹5 Crore₹50 Crore₹250 Crore

Documents Required for MSME Certificate

  • Aadhaar card
  • Rent agreement
  • Property paper
  • Cancelled Cheque
  • Company Registration i.e., Sale or Purchase Bill and PAN card
  • Business Address Proof

For self-owned property Lease deed, property tax receipt, possession letter, allotment letter
For rented property: NOC from the landlord, rent receipts, utility bills or document evidencing the landlord’s ownership.

Additional Documents

  • Copies of Sale and Purchase Bills
  • Partnership Deed
  • Memorandum of Association (MoA)
  • Articles of Association (AoA)
  • Copies of Licenses and Bills of Machinery Purchased

Charges for MSME Certificate

MSME certificate can be obtained for an all-inclusive cost of ₹1999 per certificate. This can be paid via secured online gateways.

How to register as an MSME?

MSMEs can register simply by visiting https://msme.gov.in/online-application and filling the application form. Once the registration process is complete, applicants can get MSME certificate within 5 working days. This certificate does not expire and is relevant for both manufacturing and service sector enterprises.

Benefits of MSME Certificate

  • It is helpful in bidding for and obtaining government tenders
  • An MSME certificate gets 15% import subsidy on loans for fully automatic machinery
  • It becomes easy to get licenses, approvals and registrations for any SME
  • An MSME with the registration certificate can get the ISO certificate expenditure reimbursed
  • It helps in getting low interest rates
  • Registered MSMEs gets tariff and tax & capital subsidies, as well as exemption under Direct Tax Laws

What is Udyog Aadhar?

Udyog Aadhar was launched to simplify the process of registration for the business owners as MSMEs. It is a government registration provided with a recognition certificate and a unique number to certify micro, small and medium enterprises.

Benefits of Udyog Aadhar

  • Collateral free bank loan up to 1 crore
  • Preference in procuring government tenders
  • 1% exemption on interest rate on bank overdraft
  • Reduced interest rates on loans
  • Subsidised electricity bills
  • Protection against the delay in payment from buyers
  • Tax rebates
  • 50% discount on government fees for trademark and patent
  • Speedy resolution of disputes
  • Octroi benefits
  • Businesses can claim stamp duty and registration charges
  • Subsidy from NSIC and credit ratings
  • Offers eligibility for IPS subsidy
  • Reservation of products for exclusive manufacturing by MSME and SSI
  • Business can avail Excise Exemption Scheme
  • Enjoy easy bank mortgage
  • Businesses can become a part of International business fairs
  • States and Union territories have their package of facilities and incentives for small scale which can be availed 

Evolving state of Indian textile and apparel industry under Covid-19 outbreak’s influence

By Nitin Mittal – Founder & CEO, SOLV

India is the 2nd largest producer of Textiles & Apparel in the world, after China. 

The Textile & Apparel Industry in India is in itself, one of the oldest industries and among the highest in terms of output, investment and employment. The sector today employs 100 million+ people directly & through allied sectors, contributes to 5% of Global trade and earns USD 40 billion+ forex, apart from substantial revenue contribution towards the country’s tax revenues. With direct linkages to the rural economy and the agriculture sector, it is estimated that one in every six households in India is either directly or indirectly dependent on it for livelihoods. 

As the nation is undergoing a COVID-19 scare, there is an evident fall in apparel sale. With the closure of shopping malls and stores due to lockdown imposed by the government, and the focus of people shifting from buying lifestyle products to essentials like food and personal care, India’s apparel sector is witnessing a dip in revenues. This sector is in a crisis which must be managed to sustain it.

Today the growth of the Textile & Apparel segment in India is dependent on 20 Million+ MSMEs.

25% of jobs may be lost in Textiles & Apparels Industry and Millions of Small businesses may shut shop in the next 6 months due to the COVID19 Pandemic 

Grim Situation in South India

South India is famous for its textile industry, especially production.

Coimbatore, Tirupur, Salem and Erode in Tamil Nadu, known for this textile belt gobally , generate export revenue of over ₹25,000 crores. Tirupur alone is generates over ₹11,000 crores from more than 10,000 manufacturing units there. In Tamil Nadu there are 4.50 lakh power looms and is the second large to Maharashtra. Tamil Nadu alone represents roughly 45% of India’s entire spinning capability, 22% weaving and 70% of the knitted apparel production capability. Tirupur singlehandedly contributes to almost 50% of total knitted textile and clothing exports, followed by Ludhiana, Kolkata and Delhi NCR.

However, the crisis has brought the production to a grinding halt, because:

–       receivables and new business are affected severely

–       existing orders are getting cancelled or are on hold indefinitely, especially because global trade is yet to begin in the segment again

This has had a massive impact because almost 36% of the produce from Tirupur is exported to Europe and 34% to the US, and the remaining 30% to other parts of the world.

Double Whammy for Offline Stores

As it is the new coronavirus was plummeting sales, the covid-led shutdowns couldn’t have had a worse timinig, with regards to supplies and inventory. For most apparel retailers, the spring summer collection has arrived in stock. Now, with the current scenario – inventory levels are high, and footfalls are zilch – especially at the brick and mortar stores.These businesses are looking for ways and means to reduce the financial strain, which can be done by –

·       managing vendor payment cycles

·       working out the delay in rental pay outs

·       cutting down on extra expenses

Potential Impacts of COVID-19 on the entire Textile & Apparel Industry Value Chain

·       Cotton – Prices are speculated to take a dip

·       Man-Made Fibre – Prices of imported man-made fibre is expected to surge by approx. 30% by Sep 2020 due to China’s production on halt

·       Fabric – Due to decline in exports, the production is expected to decrease

·       Apparel – Due to decline in global demand, the production is speculated to decrease by approx. 18%

·       Yarn – Accounting for 29% of India’s textile trade – the demand and production have taken a hit. Its production is expected to decrease by approx. 15% in the coming quarter

·       Home Textiles – Due to limited or no global contact, this industry has very less impact of downfall triggered by COVID-19. Since, masks, medical gowns and PPE (personal protective equipment) have a high demand, many home textiles companies are pivoting their operations towards PPE production

Online Retailers Holding the Fort 

In comparison to offline stores and malls, fashion ecommerce online stores are operating with an intent to stay connected with their consumers during this tough phase to build stickiness and are also shfting their focus to build a demand pipeline through advance orders.

Manufacturers along with Industry Bodies are Recalibrating Strategies for Utilization of Excess Capacity

Along with majors in the industry like Welspun and re-focussing handloom & khadi industry towards mask production at state level, the governnment and the industry together are coming up with innovative ways to utilize excess capacity while also catering to the urgent demand of WHO recommended critical health protective gear manufacturing.

Policy Recommendations

To protect the textile manufacturers in India from crippling levels of bad debt, what is it that policymakers should do? Broad thoughts below:

·       Direct Wage Support: While the government may not be able to fund the daily wages in every sector, providing textile industry the wage support of ₹5000- ₹7000 per worker for at least one month should be helpful in warding off the problem of layoffs and unemployment to a large extent.

·       GST Refund: The faster way to provide support to a larger group of stakeholders is to refund GST payments made in the last six months. This will cover almost all industries – handloom weavers to shopkeepers and traders. The process has already begun but needs to be speedened to ensure cashflow is available to the micros and small players to sustain themselves, at least for the next 3-6 months. Once the lockdown is lifted, the government could offer a cut on GST rate on all textile products until the industry recovers properly.

·       Incentives for the Export Sector: Given the pandemic, the export will be worst hit, thereby losing further market share. Incentives such as duty drawback on exports made in the previous Financial Year and the current should be considered.

Also interestingly, this is the time peipeline for domestic demand for winter wear that was mostly imported could be sufficed by capacity built by manufacturers in India.

·       Revised credit appraisal lens: Guidelines for loan approval on the basis of credit rating need to be reviewed. Alternate credit lending models for the segment need to be considered seriously in order to fasten credit infusion in the segment.

·       Tax compliance: Given the nationwide shutdown, deadline for taxes should be extended. Also, because of drop in demand, the taxes need to be reviewed to minimise the impact.

·       Benefits to yarn and fabric: Rebate of State and Central Taxes and Levies (RoSCTL), IES and the Merchandise Exports of India Scheme (MEIS) should include cotton yarn and fabrics since the segment supports more than 60% of the textile and apparel segment jobs and more than 80% MSMEs.

·       TReDs compliance for cash-starved businesses: Trade Receivables Discounting System (TReDS) is a digital platform to support micro, small and medium enterprises (MSMEs) to get their bills financed at a competitive rate. Up until now, companies with a turnover of greater than ₹500 crore int he segment were mandated to be on the platform. However, the bar should be reduced to cover ₹100-₹250 crore turnover companies too, to protect the interests of smaller suppliers working with them.

Originally published here.