Bihar's post-Covid startup zones were a lifeline for migrants. But now they're running out of steam

The Print

a day ago

'When I came back after the lockdown was lifted in July 2020, I had no hope left,' he recalled. 'There was nothing.'
Then came the COVID-19 pandemic. The city that never sleeps suddenly fell silent. Work dried up, and Ahmed was forced to return to his village in Bettiah, uncertain and jobless. He was one of around 2.5 million migrant workers who returned home to Bihar because of the pandemic.
Chanpatia/Bettiah/Muzaffarpur: For 16 years, Nisar Ahmed worked tirelessly as a tailor at a small garment unit in Mumbai, sending any savings he could scrape together to his family in Bihar. The 52-year-old only managed to visit them once a year, sometimes not even that.
But as it turned out, he found hope again, barely a few kilometres from his home. The Bihar government had set up a new 'startup zone', or cluster of small factories, to rehabilitate returning migrants, and Ahmed got a job as a tailor at one of the textile units there.
'I've been working here…close to home now. 'I live with my family again,' he said, his voice laced with pride.
'I missed my children growing up—I never saw their childhood. Six months ago, I finally built my own house,' he added, as he sat over his sewing machine, stitching a lavender shirt with quiet focus.
Moreover, life is more affordable. 'We used to pay Rs 50 a kilo for rice there. Here, it's Rs 17 per kilo. Back then, we couldn't save much.'
But five years on, Ahmed's optimism is fading. The highly publicised 29.2-acre Chanpatia Startup Zone on the outskirts of the dusty main town, once hailed as a rare success story in providing migrant workers a fresh start, is losing steam.
Half the units are shuttered. The rest are battling a severe funding crunch, as orders have dried up.
'I hope the government helps us soon—I don't want to leave home again to find work. The way people treat us, Biharis, outside Bihar is very demeaning,' said Ahmed.
At Safaana Garments, run by Mohammad Ahsaan, half the sewing machines sit idle. 'We're operating at 50 percent capacity because orders are scarce,' he said, gesturing toward a room partly filled with piles of blue boxes containing shirts from his brand, A-1 Bharat.
The Chanpatia Startup Zone was set up in 2020 in West Champaran district, about an hour from the district headquarters in Bettiah, after a Bihar government skill-mapping survey found that most returning migrant workers had worked in textile and garment factories across Punjab, Maharashtra, Delhi and Gujarat.
To rehabilitate them, then district magistrate Kundan Kumar proposed a government-backed startup hub. Since readymade garments were the district's designated product under the One District One Product (ODOP) scheme, textiles became the natural focus in the hub, also known as 'Navpravartan startup zone'.
A large vacant godown owned by the Agricultural Marketing Committee was repurposed to house the units. The central government launched the ODOP scheme in 2018 to promote one specialised product from each district to boost local economies and generate jobs.
The government pulled out all the stops and the initiative quickly gained traction. Loans of up to Rs 25 lakh, along with subsidies of between 15 percent and 35 percent, were extended under the Prime Minister's Employment Generation Programme (PMEGP), a flagship scheme providing subsidised bank loans to aspiring entrepreneurs.
Entrepreneurs were allocated space at nominal leases—just Rs 1 per square foot—under the Bihar Industrial Area Development Authority (BIADA).
According to Rohit Raj, general manager of the District Industries Centre (DIC) in Bettiah, 57 units were initially established, about 95 percent in textiles.
The hub became a model for rural economic revival and was later even replicated in Muzaffarpur.
At its peak, it employed over 7,000 people and churned out everything from readymade garments to utensils and cricket bats.
The signs of prosperity were obvious. Shopping complexes and branded outlets such as Tata Westside and Zudio suddenly sprang up in the once largely agricultural West Champaran district with a population of over 4 million. As people had more cash to splurge, a new multiplex also opened its doors in Bettiah.
The Chanpatia initiative even attracted entrepreneurs from other parts of India. Navneet Raj, who ran a garment factory in Noida, relocated his brand, ADR Shirts, to Chanpatia.
'I'm originally from Chanpatia, and I saw a clear opportunity here as the government was providing good infrastructure at a nominal cost. I pay just Rs 4,000 in rent for 4,000 square feet. Where will you get such subsidised rent?' he told ThePrint.
He was completely sold. 'The government also helped us secure a loan under the PMEGP scheme. That's why we decided to shift our business here.'
Raj began with nine sewing machines, which became 26, with around 26 workers on his rolls, earning Rs 700-800 a day.
A steady hum of sewing machines fills the room in Raj's unit as workers focus on stitching. In one corner, a few women snip loose threads and finish garments quietly. A large nearby table is used for cutting fabric, while at a designated ironing station, a pile of pink shirts is being ironed, one by one.
'Our production has grown five to six times,' he said. 'Lower rent, access to skilled local workers, rising demand for local products and competitive pricing have all contributed to this growth.'
But for many others, the dream has begun to unravel. Once hailed as a model of post-pandemic recovery and rural entrepreneurship, the Chanpatia startup zone is struggling to maintain its momentum.
Many returning migrant workers who took the plunge into entrepreneurship are now floundering. Today, nearly half the units have shut down. Only 28 are still operational, with about 2,000–2,500 people.
Small business owners have raised their concerns with state officials through letters and meetings. Some have even threatened hunger strikes to demand urgent government support. Many are urging political parties to address these issues ahead of the elections.
'No one's talking about us in their campaigns. It's like they left us here and never looked back,' said Mohammad Ahsaan, owner of Safaana Garments, where Nisar Ahmed is employed
'Some units couldn't survive due to a lack of working capital and marketing reach,' said Rohit Raj. 'However, the state government now plans to extend financial and infrastructural support to help existing businesses recover.'
Mihir Kumar Singh, additional chief secretary of the Industry Department, Bihar, said the government is aware that smaller industrial units in Chanpatia need working capital to scale up. While acknowledging this gap, he said the state is already extending a wide range of other benefits.
These include capital support, subsidised accommodation in the form of land and sheds, plug-and-play facilities, subsidised electricity, and strong transport infrastructure.
'Bihar has perhaps the best industry policy, be it textile or any other priority sector, in the country,' Singh told ThePrint. 'The state government is providing all possible support, and in the coming days, we will announce several new initiatives to provide capital assistance, financial and banking support, and improved accessibility for these smaller units.'
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A burgeoning industry
Bihar's textile industry is brimming with potential. It has a rich history that goes back to ancient times when the state was known for its fine cotton and silk fabric.
Today, Bhagalpur, known as 'Silk City', is famous for its tassar fabric. But most of the traditional textile business was in the unorganised handloom sector.
But it was only in the post-COVID period that the textile sector got a much-needed boost after the state government started promoting Bihar as a competitive manufacturing hub.
As part of this push, the government has rolled out a slew of measures in recent years to promote the textile industry in the state. In July last year, the Bihar government's Department of Industries organised an investors' meet in Patna to attract investments in the sector.
It is also offering financial incentives to upgrade infrastructure like textile machinery and providing training to weavers.
Textile clusters were set up in several districts, including Muzaffarpur and Bhagalpur. Apart from stitching units, some of them also include embroidery workshops.
Besides textiles, the state has also been tapping its potential in apparel manufacturing and exports. According to the Apparel Export Promotion Council (APEC), garment exports from Bihar in 2023-24 grew by an impressive 58.6 percent.
'This indicates that Bihar state has a huge potential in apparel manufacturing and exports. However, we must also note that the share of Bihar in India's total apparel exports was only .09% while earlier it was only .05%,' said a statement by APEC in July 2024.
The state government had identified a 1,719-acre land in West Champaran for a mega textile hub. It even sent a proposal to the Union textiles ministry to consider setting up a textile park under the PM Mega Integrated Textile Region and Apparel Parks (PM MITRA).
So what went wrong in Chanpatia zone?
One problem was that many entrepreneurs took massive loans, but then they couldn't scale up and funds soon ran out.
Take Niazuddin Ansari, a former tailor in Ludhiana, for instance. He returned to Bettiah during the lockdown and set up Nomani Garments in a 2,050 sq ft space.
'I received Rs 7 lakh under the PMEGP scheme. It felt incredibly satisfying to become an entrepreneur and provide employment to others,' he said.
But the entire loan went into buying machinery and setting up the unit. And there was only so far the business could grow.
'We only get small orders—like stitching 50 uniforms for the Bihar Police,' Ansari added. 'Even if bigger orders come, we can't take them due to a lack of funds.'
Another resident, Idrees Ahmed, took a Rs 9.4 lakh loan to start a unit making T-shirts, pajamas, and nighties. 'I began with 16-17 workers; now we're down to six. We just don't have the capital to sustain or grow,' he explained.
Mohammad Ahsaan of Safaana Garments echoed the same concerns.
'I've exhausted all my savings. Financial support is crucial—talk alone isn't enough. Without monetary help, we can't upscale.'
Approaching banks for loans wasn't an option for Ahsaan. 'Banks require balance sheets showing profits, which we don't have, so our loan applications have been repeatedly rejected. We want the government to intervene and negotiate with banks to support us or help us directly,' he said.
Another major hurdle is the absence of loom and fabric manufacturing in the state. Units are forced to source fabric from other states, pushing up costs and leading to delays.
Even Navneet Raj of ADR Shirts has raised the issue with the authorities.
'If fabric is manufactured locally, half our problems will be solved. We've also approached the industry department regarding this,' he said.
There may be a glimmer of hope.
Rohit Raj, General Manager of DIC Bettiah, said that two major textile investments are in the pipeline.
Sanjeev Woolen Mills from Ludhiana is investing Rs 55 crore to set up a dyeing and fabric unit in the nearby Kumarbagh industrial area. Another company, Purvanchal Textile from Gorakhpur, will also begin operations there.
'These units will help address the fabric availability problem and support the smaller units in Chanpatia,' Rohit Raj said. 'We are developing Kumarbagh as a textile hub, with Nepal and eastern UP as key markets.'
In Muzaffarpur, some signs of progress
Chanpatia's startup zone may be faltering, but a textile cluster 150 km away in Muzaffarpur —inspired by the Chanpatia initiative—is showing signs of modest progress.
The cluster, established in the Bela industrial area between 2022 and 2023, was the idea of Vijoy Kumar, an IAS officer from Muzaffarpur serving as additional secretary in the Ministry of Textiles.
He was so inspired by Chanpatia's success during a visit home for Chhath Puja in 2021 that he decided to replicate the model in his hometown.
'I met with state government officials and discussed the idea of starting a textile cluster in Muzaffarpur. We found a closed IDPL factory and I requested the Bihar government to help acquire the space for this purpose,' Kumar recalled.
'I even brought a well-known industrialist to inspect the site, but they declined. When I asked why, they told me Bihar didn't offer incentives like other states, including Madhya Pradesh,' he added.
The feedback pushed the Bihar government to revamp its textile and leather industry policy in 2022. 'The policy now offers a 15 percent capital subsidy, 100 percent SGST reimbursement for five years and subsidised electricity to encourage investment,' Kumar said.
Managed by BIADA, the Muzaffarpur textile cluster was built under a 'plug-and-play' model, offering ready infrastructure, subsidised rent at Rs 6 per square foot, discounted power and loans under various government schemes. Flats and hostels were also constructed for workers.
Entrepreneurs were invited to set up units with support from the Chief Minister Udyami Yojana, which provides a Rs 10 lakh loan in three installments—only Rs 5 lakh of which is repayable.
The scheme particularly supports youth from Scheduled Castes, Scheduled Tribes, Extremely Backward Classes and women. It also includes provisions for training.
Today, the cluster houses around 80 units, including companies like Pearl Global, V2 Smart and Menu Creation. These units cater to both the domestic and export markets, and employ an estimated 6,000–7,000 people.
The initiative has opened new doors for many. Manoj Kumar Tiwari, who worked in textile companies across India, returned to Muzaffarpur in 2023 to launch Ram Bhavan Industries.
'We have 100 machines set up here. We receive stitching orders where fabric and cutting are provided. Recently, we got an order from Fabindia to stitch kurtis. They will supply the fabric and cuttings. We're very excited about this order,' Tiwari told ThePrint.
However, the going has been tough for many smaller unit owners in the Muzaffarpur cluster. Like Chanpatia, they too are hamstrung by limited market access, lack of raw materials or locally available fabric, and shrinking funds.
'I have 100 machines set up, but I can use only 30 to 40 because we haven't been able to scale up due to a lack of orders. Not many people know about us yet. Therefore, we are running at a loss as of now,' Tiwari said.
'Overall, the bigger units with established markets are doing well here, while smaller units are still trying to find their footing,' he added.
Raju Kumar Das, a former tailor in Ludhiana, started his unit after training under the scheme. He now makes pajamas, T-shirts and leggings.
'In Ludhiana, we never had to worry about raw material or markets,' he said. 'We started by sourcing fabric from Ludhiana, now some come from Patna. But we still don't get big orders—only small ones from local wholesalers,' he added.
He said the unit handles just 2,000 to 4,000 pieces a month, earning Rs 5-10 per item. 'That's barely Rs 20,000 to Rs 30,000 in revenue—not enough to sustain the business. We need at least 10,000 units a month to survive.'
Trust also remains a hurdle. 'I reached out to contacts in Ludhiana for orders, but they're still hesitant to work with Bihar-based units,' he added.
Manoj Tiwari also said that many investors remain wary. 'There's still a stigma. Big players prefer investing in Punjab, Delhi, Gujarat—even Bangladesh or Vietnam. They fear their money will get stuck in Bihar. That perception is hard to shake,' he said.
Meanwhile, additional chief secretary Mihir Kumar Singh, quoted earlier, emphasised that Chanpatia should not be compared with Muzaffarpur, as the latter operates on a larger scale with bigger industrial units.
Building markets, not just machines
Many entrepreneurs are now pushing for a more direct connection to buyers. One of their demands is a weekly wholesale market, similar to those in places like Khalilabad in West Bengal, where business runs 24/7, twice a week.
'If the government can help us set up a weekly market, it would make a huge difference,' said Das. 'It would give us direct access to buyers and help us earn more.'
Entrepreneurs also point to the success of the Muzaffarpur bag cluster in the same Bela industrial area. There, larger units with fixed markets regularly outsource work to smaller units, ensuring steady demand.
'We need something similar in textiles,' said Tiwari. 'Larger units in our cluster should be encouraged to give regular orders to smaller ones.'
Officials at BIADA said steps are already underway. 'Setting up a marketplace is under consideration. We're also working to connect smaller units with bigger players so they can secure steady orders,' BIADA Deputy General Manager Neeraj Kumar Mishra told ThePrint.
Vijoy Kumar, the IAS officer who helped conceptualise the Muzaffarpur textile cluster, believes the solution lies in both government support and local initiative.
'The textile sector is labour-intensive, and Bihar has no shortage of skilled workers. These same people migrate elsewhere for work. If properly supported, this sector can generate strong employment right here at home.'
The question that many are asking is: Will the two textile hubs succeed in stitching a new future for themselves?
The textile clusters in Chanpatia and Muzaffarpur certainly have the potential to transform the nondescript mofussil towns and cities, but with a little help from the authorities.
For thousands of workers like Nisar Ahmed, the only hope now, is the government.
(Edited by Sugita Katyal)
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