The foreign direct investment (FDI) flows could pick up only modestly in the current financial year. The country's manufacturing FDI is likely to see some traction from government schemes. Recently, the textiles sector has gained limelight amid FII inflows. The rapid increase in the investment reflects the interest of foreign institutional investors in the Indian economy.
Singapore-based foreign institutional investor Nav Capital VCC-Nav Capital Emerging Star Fund has acquired a stake in Gujarat-based textile major Axita Cotton Limited.
Notably, the government has said that it will form an Environmental, Social, and Governance (ESG) taskforce for the textiles sector to enhance its credibility in view of the country's own commitment to sustainability.
The textile sector is considered to be one of the critical sectors of the economy. It accounts for more than 2 per cent of India's total GDP and more than 12 per cent of the manufacturing sector gross domestic product (GDP). It is also the second largest provider of employment, after agriculture.
Axita Cotton is the manufacturer and exporter of raw cotton. It said that Nav Capital bought as many as 10 lakh shares via bulk deals. The firm had recently made headlines with its announcement of a share buyback programme. The leading cotton ginning player recently also secured an order worth USD 3.28 million from neighbouring Bangladesh.
Meanwhile, the ESG taskforce, according to a PTI report, will look at environmental, social and governance issues in the textile sector as credibility is becoming more and more important and exporters shared that they were getting twice the value for the same product if it is a sustainable product.
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