MUMBAI, March 30: The diversified engineering major Larsen & Toubro (L&T) is set to bag the construction contract for a special-industrial zone in Gujarat for garments. The garment zone is being set up by the Clothing Manufacturers Association Of India (CMAI).Though the final amount for the contract is yet to be finalised, Larsen & Toubro is likely to receive a sum of Rs 7 crore for constructing a zone in Vapi, Gujarat, which houses 55 companies engaged in the manufacture of garments. The zone is expected to provide the manufacturers with enough space and will be completed within two years. As much as 50 per cent of the products manufactured at the zone will be exported and the remaining will be sold in the domestic market, CMAI sources said.
The idea for a zone in Gujarat, on the lines of the export zone in Mumbai, was mooted by Keshubahi Patel way back in 1991 when he was the chief minister. A final clearance for the allotment of land from the Gujarat Industrial Development Corporation delayed theconstruction of the zone, sources said. The Maharashtra government's decision to impose a 4 per cent tax on garments is eating into the profits of manufacturers. Though the tax is helping to generate revenues, it has led to the shifting of business to other states like Karnataka, Tamil Nadu and Gujarat, CMAI sources said. The state government had made known its inability to reduce the taxes at the moment when the finance ministry was informed about the negative effects that a 4 per cent levy can cause.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
