By Charu Bahri
Mount Abu, Rajasthan: The Indian government has proposed to set up mega textile parks in challenge mode, even as similar programmes have, in the past, failed to meet their investment and employment generation targets.
India’s textiles sector contributes to 2.3% of the gross domestic product and with 45 million direct workers, is the country’s second largest employer, after agriculture. About 80% of its capacity lies in micro, small and medium enterprises.
When unveiling the 2026-27 budget earlier this year, finance minister Nirmala Sitharaman proposed setting up mega textile parks in challenge mode. But she had made a similar announcement five years ago at the peak of the Covid-19 pandemic, for setting up seven textile parks with a three-year timeline.
In March, the government told the Lok Sabha that it has finalised seven textile parks under Pradhan Mantri Mega Integrated Textile Region and Apparel (PM MITRA). Today, approach roads are being constructed in three of the proposed parks: in Dhar (Madhya Pradesh), Warangal (Telangana), and Kalaburgi (Karnataka), while two parks in Virudhunagar (Tamil Nadu) and Amravati (Maharashtra) are inviting potential allottees.
Two others, in Navsari (Gujarat) and in Lucknow (Uttar Pradesh), saw their bid documents being approved by the Public Private Partnership Appraisal Committee. The private developers awarded these projects will go on to create integrated textile parks under the Design, Build, Finance, Operate and Transfer (DBFOT) model.
India needs parks that meet targets. Without in-depth audits and remedial action, parks are unlikely to help push Indian manufacturing’s share in the gross domestic product from 15-16% in 2014, to the targeted 25%, a target that has been eluding India since Make in India was launched.
IndiaSpend has asked the secretary, Department for Promotion of Industry and Internal Trade, how the acquisition of land, a factor that usually delays park development, is proposed to be speeded up, and whether the private sector is intended to be roped in for the same purpose. We will update this story when we receive a reply.
The precursor programme
Two decades ago, the Union government launched the Scheme for Integrated Textile Parks (SITP) to provide “state of the art world-class infrastructure” to set up textile units and facilitate them “to meet international environmental and social standards”.
A 2016 analysis of the performance of the programme showed that, of the 50 parks sanctioned before 2014, 30 were functional—and even among them, only four parks were fully functional. The rest were still looking for investors, because of which this subset had achieved only 46% of its investment targets and 57% of its employment targets.
Eleven parks were cancelled due to delays in the conversion of land, land clearances, or sometimes, disputes surrounding the land or its non-availability. Sanctioning delays and differences between the implementing members also led to park cancellation. Two parks applied for cancellation because of poor market conditions.
In 2023, a report by the Comptroller and Auditor General of India (CAG) identified delays of one to more than 10 years in completion of the SITP parks, cancellations of 43% of the sanctioned parks, and generation of 30% of the envisaged employment and 50% of the envisaged investments from the functional units.
Brandix India Apparel City, an export-oriented integrated textile park developed on 1,000 acres allotted by the government under the SITP in Visakhapatnam, Andhra Pradesh, was originally planned to support employment of around 60 people per acre at full development.
“Today, it provides employment to approximately 22,000 people across the ecosystem spanning about 600 acres, with further growth expected as additional investments come on stream,” said Kushal Motiani, the head of business development and marketing at Brandix India Apparel City. “The pace of expansion has been influenced by broader global apparel market conditions, which have moderated investment in the last decade,” he said.
The CAG report questioned why “without ensuring successful completion of the parks sanctioned during the 10th Plan period by March 2007 as envisaged in the Scheme guidelines, the Ministry proceeded with sanctioning more parks in the 11th and 12th Plan periods”.
It is not just textile parks that see delays. Of 4,257 industrial parks mapped on the India Industrial Land Bank as of July 7, 2026, spanning 681,000 hectares, 134,000 hectares are still available. Yet, new industrial parks, apart from the mega textile parks, continue to be announced.
In March 2026, the Union government approved the Bharat Audyogik Vikas Yojna (BHAVYA) scheme, allocating Rs 33,660 crore to develop 100 greenfield plug-and-play industrial parks across the country.
The BHAVYA scheme, industrial policy expert Sharmila Kantha, a former principal consultant with the Confederation of Indian Industries (CII), said, may suffer the same delays as previous industrial park schemes. In the years we prepare trunk infrastructure—such as internal roads, water supply lines and a power grid—for a park, Kantha said, “our competitor countries will have pulled themselves into advanced, strategic and high-tech industries”.
Remote locations, marketing gaps
Industrialisation has traditionally taken place in cities where workers, physical and social infrastructure are readily available, in the process, spreading their urban limits. But Indian metropolitan regions are already too large, and affordable land for new industrial plants is not readily available.
Consequently, Ajay Shankar, former secretary, Department of Industrial Policy and Promotion, Government of India, pointed out, “state government agencies usually put together land and develop industrial parks at a distance from thriving cities”. That has its own problems. “When you develop parks in the middle of nowhere, no one wants to go there,” said Shankar.
Creating parks in far-flung regions with poor air connectivity is especially a put-off for international investors, said Motiani. “We’re expecting the new international airport in Visakhapatnam to help us attract more investment.”
“Many parks are located away from major urban centres, making labour access difficult,” agreed Prerna Prabhakar, fellow at the Centre for Social and Economic Progress.
In the context of the mega textile parks, Varun Vaid, business director at Wazir Advisors, the firm behind the 2015-16 analysis, pointed out that while their broad recommendations had been met, the exact location of parks needed to evaluated on a case-by-case basis, as not all are centrally located, and hence accessible.
Shankar, who was the CEO of Greater Noida Industrial Development Authority decades ago when the UP State Industrial Development Corporation had launched two new parks, reminisced that they hadn’t seen any movement for many years.
“Investors stay away until things start to happen, and at that threshold, everyone wants to enter so prices rise too much, which then becomes a deterrent to investments in sectors with thin margins,” he said.
Having assembled large tracts of land, Shankar said, “the state development agency can and should keep providing affordable land for new industrial units and resist the urge to profit from rising land prices like private developers”.
Low park occupancy is also an outcome of plug-and-play industrial hubs that don’t address issues such as logistic service gaps and supply chain fragmentation, which are meant to be resolved through the industrial clustering of firms in parks.
“Clustering is expected to generate efficiencies through access to common infrastructure, such as testing facilities, regulatory support systems, effluent treatment plants, and logistics services,” said Prabhakar. “In practice, many clusters lack these shared facilities, limiting productivity gains.”
In the absence of upstream and downstream linkages within the park, she said, firms continue to face high logistics costs for sourcing raw materials and intermediates, limiting the benefits of co-location.
“Getting an anchor investor can help new parks, and even planned cities such as those in the Delhi-Mumbai Industrial Corridor acquire the critical mass they need to succeed,” said Shankar.
The Brandix Group itself was an anchor in the Brandix India Apparel City, and it pushed the development of world class park infrastructure spanning amenities for employees and ESG compliance features such as common effluent treatment plant and a water treatment plant, Motiani told IndiaSpend. Just the group employs about two-thirds of the park’s workforce.
But attracting anchor investors and related new units needs considerable outreach backed by the political leadership of the state and swift decision-making, land allotment and approvals, said Shankar, on the lines that the Dholera Special Investment Region in Gujarat has shown.
A more effective strategy to relying solely on greenfield park development, according to Prabhakar, would be to reassess and upgrade existing industrial clusters. Traditional textile manufacturing clusters, for instance, are typically located closer to labour pools, giving them a natural advantage in attracting workers. Sorting out their fragmented supply chains would strengthen the clusters, drive significant efficiencies, and enable the industry to scale effectively.
Wazir Advisors identified marketing as a big gap in the poor performance of the SITP scheme. “Very few have taken any pro-active steps to market their parks,” the report said. The authors proposed close monitoring of marketing, outreach by the ministry by way of road shows in India and overseas, and the creation of micro websites under ‘Make in India’ and Department of Industrial Policy and Promotion to publicise park schemes.
Public-private joint efforts could cut timelines, but who’s investing?
Ideally, “an industrial park should come up in 2.5-3 years,” according to Rajeev Vijay, executive director, Government and Infrastructure Advisory at Knight Frank India. “Beyond that the industry needs about 1.5-2.5 years to build their manufacturing facilities and start operations.”
Bringing in private players could help speed up the development of a park, agreed Vaid of Wazir Advisors. But, the mega textile park scheme, for instance, was not designed so.
“The central premise was that 1,000 acres for the textile sector would come from the state government; in any case private companies with so much land would prioritise other more profitable sectors,” he said.
Essentially, the government is supporting the textile industry because being labour-intensive, it has the potential to generate large-scale employment, explained Vaid. But the sector at the lower levels of the value chain—yarn production to garment making—is typically low to medium margin.
Vaid cited the example of Brandix India Apparel City employing 22,000 (of whom about 90% are women) and exporting $350 million worth of garments in 2024-25.
Vijay suggested “bringing in experienced business groups like Hiranandani, Embassy, Blackstone, Ascendas, etc. to speed up the creation of industrial parks” by “adopting a flexible model, involving incremental investments to build and operate quickly, then build further in phases as per market demand”.
But, Vaid pointed out, if the profit-driven private sector were to invest in a park, they would more likely choose a sector where the returns and addressable market are higher, such as automotives and renewable energy.
“Patient capital”, which Shankar listed as a core ingredient for the success of an industrial park, is not always forthcoming from the private sector.
Horizon Industrial Parks, one of India’s largest industrial and logistics infrastructure developers, backed by Blackstone Real Estate, has, for instance, specialised in automotive and auto components, logistics and supply chain, renewable energy, FMCG and retail, and other sectors.
By speeding up the establishment of industrial parks, private developers can “eliminate the foundational lead time that typically runs 18-24 months”, said Mahendra Waghule, the chief development officer of Horizon Industrial Parks.
“We help manufacturers move from allotment to operational readiness in a fraction of greenfield timelines by front-loading park-level clearances, master-planned utilities and Grade A plug-and-play infrastructure,” he added. “Our on-ground teams handhold occupiers through residual statutory approvals via dedicated liaison support, leveraging long-standing relationships with state authorities and single-window portals such as Maharashtra’s MAITRI and Karnataka’s KIADB.”
Despite all this, Waghule pointed out that “unit-level approvals, spanning environmental clearance, factory licensing, fire no-objection certificates, building plan sanctions, and labour registrations, remain a state-level reality that no private developer can sidestep”.
Vijay recommended the role of the government to be confined to providing trunk infrastructure and offering land to Master Developers who build parks ranging from 100-500 acres.
In the instance of five of the mega textile parks, the Master Developers are a Special Purpose Vehicle, made up by the Union and state governments, with no private players.
The CAG report had also found one park running with non-textile activities like engineering works, furniture works, seeds processing, etc. and another seized by a bank.
It had gone on to recommend that the ministry identify the reasons for non-achievement of the objectives of the scheme and take necessary action to complete the ongoing parks at the earliest in order to achieve the targeted employment and investment targets. A review of completed parks was also recommended to investigate their chance of achieving the desired targets.
“Making under-occupied existing parks a success hinges on a combination of urban and industrial planning,” observed Kantha.
This article was originally published on IndiaSpend and has been republished here with permission.
