Proactive government- now wooing the textile sector

There was this little piece of news today. On how the AP Government is managing new inndustries. We always hear about how MNCs are wooed. But was pleasantly surprised to see how far the government is going to attract even domestic corporations.

AP has been trying for quite some time to carve out a slice of the Textiles pie. Somehow hasnt been able to achieve much. And so the govt approached one of the largest textile export houses (with 750+ crores turnover anually). And the whole episode started with someone from the govt calling up the CEO of the company saying that the CM wants to come and meet (can you believe this?). The person, very rightfully, said that he will come down here and meet the CM. At the meeting the govt asked him on what it will take for him to setup a factory here in Hyderabad. He resisted citing the lack of textile infrastructure and the upstream and downstream eco-system. Point blank the govt officials asked him on what all would he need for him to setup a plant here. He was surprised.. and probably skeptical as well. He went back…

Then, after persistent followup from the govt he finally sent his wish-list. And within a very shorttime he gets this letter saying that the cabinet has approved all his requirements. Govt will actively support the initiative. And now he has announced setting up a factory here. Focussing on garment exports. After this news, some of the other larger players such as Gokaldas are also considering setting up textile factories here. Hopefully this may follow the IT, BT, Hardware and the Gem/Jewellery as yet another area where new industries are being wooed t o consider Hyderabad. Coming at a time where a few major players like Apple are leaving Bangalore/India, citing high cost and other challenges, this is really good news. Not surprising as Hyderabad’s exports (IT and otherwise) have been beating the national average for some years now (last years griwth was 50% compared to the indutry growth of about 30+%).

Combine this with another news in EconomicTimes this week that Indian growth story is very marginally dependant on exports, unlike other Asian economies including China (40% of GDP is exported!). We are less likely to be impacted by global events and fiscal shocks such as interest rate changes and slowdowns in economies such as US. I strongly believe that we have a huge opportunity for anything within the country. Like recently Nasscom reports show that the domestic software market is over $12billion. And growing strongly! At this pace, soon we will have a huge software ecosystem that is needed to deliver for and support this demand. And it may not be too unreasonable to expect that the domestic software consumption may be much higher than the exports. Now, here the interesting point is that most of the software products are “imported” for the domestic consumption. Here lies a serious expansion opportunity for the industry. To venture into software products in a much bigger way. (One of the very few product successes is Pramati Technologies, that is based right here in Hyderabad).

In all, we are looking at some very good things likely to happen in Hyderabad.

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