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.

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.

Major Initiatives

• National Textile Policy 2000 (NTxP -2000)

• Technology Mission on Cotton (TMC)

• Technology Upgradation Fund Scheme (TUFS)• Environment Legislation & Eco- Labelling Scheme

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

Objectives

•Sustain global standing • Dominant presence in the domestic market • Create competitive environment • Build world class state-of-the-art technology • Product upgradation and diversification

• Sustain and strengthen the traditional skills, knowledge and capabilities

Revitalise the institutional structure

• Expand productive employment

• Making IT an integral part

• Involve and ensure the active cooperation and partnership of the governments and other organisations

strategic thrust on• Technological Upgradation

• Enhancement of productivity

• Quality consciousness

• Strengthening the raw material base

• Product diversification

• Increase in exports and innovative marketing

strategies

• Financing arrangements

• Maximising employment opportunities

• Integrated human resource development

aiming for some main Outputs

• Achieving the target of textile and apparel exports from the present level of € 12 billion to € 55 billion by 2010.

•Implement vigorously in a time bound manner, the TUFS covering all manufacturing segments of the industry.

• Achieve increase in cotton productivity by at least 50% and upgrade its quality to international standards, through TMC.

• Encourage private sector to set up world class, environment-friendly, integrated textile complexes and processing units.

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) formodernisation of the industry.

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.

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 embroideryand technical textiles- Garment / made-up manufacturing- Processing of fibres, yarns, fabrics, garments and made-ups Jute industry

Scope of the Scheme

GENERAL ELIGIBILITY CONDITIONS

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*

* A certificate certifying the residual life of the imported second hand machinery must be furnished to the lending agency Acertificate from the textile commissioner will also be necessary to the effect that the equipment is not indigenously available.

Type of Textile Machinery Eligible for import

Projectile shuttle less loom- Machinery for jute softening and carding, drawing, spinningand 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

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

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 yearsPeriod 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

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

Nodal Agencies

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 AgenciesSegments

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.

Approaching TUFS

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 expectationsthus 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

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.

Budget Allocation

@ 244000 Euro per year

Contingency for

Mini Mission III, IV

4,6 million EuroMini mission IV

16,9 million EuroMini mission III

113,5 million Euro Mini

Mini mission II

9,8 million EuroMini mission I

Technology Mission on Cotton, Mini Mission & Agencies involved

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

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.

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.

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)

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.

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

Priority Areas

Development of eco-friendly alternatives Health and toxicology studies due to, food radiation, heavymetals 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

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 betterenvironment 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.

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 andInternational funding

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.

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

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

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.)

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.

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.

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.

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.

Within the framework of the project,

a survey was carried out in 2000 to collect data onvarious stakeholders involved in promoting CP financing.

The survey revealed that newinitiatives are emerging, particularly in governmental or semi-governmental institutions.Financial institutions lag behind.

Very few commercial banks perceive a CP strategy adoptedby 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.

International Finance Corporation (IFC)

Environment Division2121 Pennsylvania AvenueWashington, D.C. 20433UNITED STATESTel.: +1 202 4730661Fax: +1 202 9744348E-mail: ifcpu@ifc.orgInternet: www.ifc.org

IFC is the World Bank Group affiliate thatprovides debt and equity financing exclusively to private sector projects indeveloping countries.

IFC welcomesproposals for commercially viable Cleaner Production projects from private sponsors.The benefits of Cleaner Production are presented in the World Bank GroupPollution Prevention and Abatement Handbook, IFC sponsors several private investment fundsthat may also finance Cleaner Production projects.

World Bank (WB)Program Team Leader for Urban, Industry and Energy1818 H Street, N.W.Washington, D.C. 20433UNITED STATESTel.: +1 202 4585686Fax: +1 202 4770565E-mail: Dhanrahan@worldbank.orgInternet: www.worldbank.org

The World Bank Group promotes Cleaner Production approaches, as evidenced bythe 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 foreligibility. In some circumstances, Cleaner Production is also seen as a useful tool in helping to increase efficiency and productivity in SMEs.

European Investment Bank (EIB)Head of Environmental Co-ordination100 Boulevard Konrad AdenauerLuxembourg-KirchbergL-2950 LUXEMBOURGTel.: +352 4379 2769Fax: +352 4379 2860E-mail: p.carter@eib.orgInternet: www.eib.org

The European Investment Bank is theEuropean Union’s long term financing institution established in 1958 to furtherEuropean integration. The EIB actively supports Cleaner Production financing,mainly through the provision of long termloans. 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.

Asian Development Bank (ADB)P.O. Box 789, 0980 ManilaPHILIPPINESTel.: +632 632444Fax: +632 6362444E-mail: wevans@adb.orgInternet: www.adb.org

Regional Environmental Technical Assistance (RETA) project for the

Promotion of Cleaner Production Policies and Practices in Selected Member Countries

Kreditanstalt für Wiederaufbau(KfW)Palmengartenstrasse 5-960325 Frankfurt a.MGERMANYTel.: +49 69 7431 3142Internet: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.

Japan Bank for InternationalCooperation (JBIC)Director, Environmental Division4-1, Ohtemachi 1-ChomeChiyoda-Ku, TokyoJAPANTel.: +81 3 5218 3903Fax: +81 3 5218 3980E-mail: naoki-mori@jbic.go.jpInternet: www.jbic.go.jp

the bank provides loans forpreventing industrial pollution in developing countries, e.g., small scale industry (SSI)

Netherlands Development FinanceCompany (FMO)Environmental UnitP.O. Box 930602509 AB The HagueNETHERLANDSTel.: +31 70 314 9734Fax: +31 70 314 9764E-mail: b.hamelynck@fmo.nlInternet: www.fmo.nl

The Netherlands Development Finance Company is involved in Cleaner Productionfinancing promotion activities (training)and Cleaner Production financing activities(long-term loans). Activities in 77 countriesin Africa, Asia, Latin America and Central& Eastern Europe headquarters in the Hague.

CDC Capital PartnersEnvironment SpecialistOne Bessborough GardensLondon SW1V 2JQUNITED KINGDOMTel.: +44 20 7963 3872Fax: +44 20 7963 3943E-mail: dallwood@cdcgroup.comInternet: www.cdcgroup.com

CDC Capital Partners have over 30 officesworld-wide located in Latin America,Caribbean, sub-Saharan Africa, South Asia,South East Asia, East Asia and PacificIslands. They provide Cleaner Productionbusiness consulting, policy advice andtraining activities in addition to equitybased investment.

Organisation for Economic Cooperationand Development(OECD)Coordinator (EnvironmentalManagement in Enterprises)2, rue André-Pascal, 75775 ParisCedex FRANCETel.: +33 1 4524 1385Fax: +33 1 4524 9671E-mail: peter.borkey@oecd.org

Internet: www.oecd.org/envThe 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

U.S. Agency for InternationalDevelopment (USAID)Urban/Industrial ManagerRonald Reagan Building, 1300 Pennsylvania NWRoom 2239 N.S., LAC/RSD/E, Washington, D.C. 20523-0025UNITED STATESTel.: +1 202 712 1219 Fax: +1 202 216 3262E-mail: gijackson@usaid.gov, 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 CleanerProduction) and Cleaner Production financing activities. USAID and the Environmental Export Council (EEC) havebeen working with five industry associations in Bolivia, Ecuador and Peru

Tata Energy Research Institute(TERI)Research AssociateHabitat Place, Lodhi Road New Delhi – 110003INDIATel.: +91 11 4622 246 Fax: +91 11 4621 770E-mail: vbhat@teri.res.inInternet: www.teriin.org

TERI is active in Cleaner Production financing promoting (business consulting, policy advice, research onCleaner Production investment,publications on Cleaner Productioninvestment, demonstration projects).

The World Conservation Unit(IUCN)Environmental Economist28 Rue Mauverney1196 Gland - SWITZERLANDTel.: +41 22 9990 273Fax: +41 22 9990 025E-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 onissues related to bio-diversity.Internet: www.economis.iucn.org(or) www.iucn.org

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.

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.

Clean Technology Initiative (CTI)

CTI is an United States Agency for International Development (USAID) project emphasizingprivate 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.

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.

CTI- USAID, Types of Assistance

CTI- USAID, Types of Assistance

Trade in Environmental Services and Technologiesproject (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

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 thedemonstration 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 andvarying sectors.

The initiatives have to be carried out from cradle to grave.

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.

Indian Textile Industry interest

ITI has to meet the environment challenges for its survivalPossible only the technology upgradation

Denial of upgradation will perish the industry with adverse effects on

employment opportunities

Export earning

National economy

GOI Schemes

GoI is running many schemes bringing new policies for the well being of the sector under domestic andglobal markets.

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 ChainManagement (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.

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.

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

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.

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 denyits 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.

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

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

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

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