FDI In Textiles And Apparel Sector— Procedures, Fees And Documents Required

100% FDI is allowed in the textiles and apparel sector through an automatic route.

Many documents are required for FDI in the sports sector which are as follows:

• List of names, addresses, and identification proof of all foreign collaborators of the investor company/entity
• From both investor/investee entities- Certification of Incorporation and MoA
• Copy of joint venture agreement/ shareholders agreement/technology
• Copy of downstream intimation
• Copy of relevant past FIPB/SIA/RBI joint with the current proposal
• Copy of Downstream Intimation
• An affidavit to ensure all documents are relevant
• Valuation certification approved by a certified chartered accountant
• CS Certificate
• Declaration by the Authorized Representative of the Indian Company/LLP
• Pre and post-shareholding pattern in the Indian company
• Copy of the order of the High Court on the scheme of merger/ demerger/ amalgamation (if applicable)
• RBI approval on the amount of refund concerning the amount of the issue (if applicable)
• Valuation certificate
• Approval letter (if non-compliant with the guidelines – if applicable)
• Relevant RBI approvals for an issue of equity shares against funds payable to the foreign investor
• FIRC/ Debit statement
• Know Your Customer (KYC)

There are conditions tapping for the procedure of FDI approval which must be understood by investors.

1. Robust Demand - India is expected to produce 7.2 million tonnes of cotton by 2030, primarily due to rising consumer demand. India's FY22 exports of textiles and clothing, including handicrafts, totaled US$ 44.4 billion, a 41% YoY increase to reach the goal of producing $250 billion worth of textiles and exporting $100 billion worth by 2030.
2. Increasing Investment - Large sums of money have been made available by the government in the union budget for 2023–2024 under programs like the Rs. 900 crore (US$ 109.99 million) Amended Technology Upgradation Fund Scheme (ATUFS) to promote greater private equity investments and create jobs. From April 2000 to September 2023, foreign direct investment (FDI) inflows into the textile industry totaled US$ 4.34 billion.
3. Policy Support - Man-made fabrics (MMF), MMF yarns, and garments are subject to a unified goods and services tax rate of 12%, as announced by the Indian government. This rate will take effect on January 1, 2022.
   Man Made fiber and technology textiles are the focus of a five-year, Rs. 10,683 crore (US$ 1.44 billion) Production-linked Incentive (PLI) Scheme.
4. Competitive Advantage - The Indian government intends to create 75 textile hubs across the nation, according to a June 2022 statement made by Mr. Piyush Goyal, Minister of Textiles, Commerce and Industry, Consumer Affairs & Food, and Public Distribution. Compared to other major textile producers, India has a competitive edge in terms of trained labor and production costs.

Following are the key advantages for investors in FDI in textiles and apparel sector:

1. New Job Opportunities - The foreign capital inflow has boosted the Indian economy by directly and indirectly creating job possibilities.
2. Access to global market - Foreign direct investment (FDI) has facilitated the globalization of the fashion clothing business in India, hence expanding the reach of Indian brands and products to a wider audience.
3. Penetration of new technologies - New technologies and enhanced procedures brought about by FDI have increased industrial efficiency and made it more globally competitive.
4. Meet standard requirements - Higher standards have been pushed by FDI-induced competition, which has improved product quality and increased supply chain efficiency.

Foreign direct investment (FDI) in the apparel and textiles industry is a crucial factor in the growth and development of the Indian garment industry, which is a sector with tremendous potential and is expanding rapidly. Increased production and exports, as well as the introduction of new technology and enhanced procedures, have resulted from the inflow of foreign money.

The growing demand for fashion and lifestyle products in India and around the world will likely propel the Indian fashion apparel industry's growth in the years to come, despite obstacles like a highly fragmented supply chain, restricted access to capital and technology, and inadequate infrastructure.

Several other factors to consider for investors while investing in medical industries are listed below:

• Before involving huge investments, applicants must be prerequisites to check the kind of companies the government allows them to invest in. Because investment in the stock market is volatile and may not recover your loss, leading to unwriggled investment which will not recover at the time of redemption of company loss.
• Additionally, before application applicants need to inspect and ensure that all the requisite documents are submitted online without discovering any omissions and incorrect information within the documents. FDI is largely inspired to bring investors forth along with certain advantages that benefit sectors.

Investors must also need to check eligibility criteria for buying investment in India in sectoral companies.