India has taken a firm step towards dominance in the global textile market with the introduction of the Production Linked Incentive (PLI) Scheme. To boost the domestic manufacturing of man-made fabric (MMF), garments and technical textiles, the PLI scheme was launched in 2021. The central government has designated Rs 10,683 crore to fulfill the objectives of the PLI scheme. The scheme may soon extend to cover the garments sector as well.
The PLI scheme for textiles is part of the overall announcement of PLI schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of Rs 1.97 lakh crore. With the announcement of PLI schemes for 13 sectors, minimum production in India is expected to be around Rs 37.5 lakh crore over five years and minimum expected employment over five years is nearly 1 crore.
India is the world’s sixth-largest exporter of textiles and apparel, with the domestic apparel and textile industry contributing about 2.3% to the country’s gross domestic product (GDP), 13% to industrial production and 12% to exports.
PLI Scheme Benefits
The PLI scheme for the textile sector in India has several benefits, including:
- Increased investment: The scheme is expected to attract over ₹19,000 crore in fresh investment, and a cumulative turnover of over Rs 3 lakh crore.
- Increased employment: The scheme is expected to create over 7.5 lakh jobs in the textile sector, and several more in supporting activities.
- Women empowerment: The textile industry employs a large number of women, so the scheme will increase their participation in the formal economy.
- Investment in backward areas: The scheme prioritizes investment in Aspirational Districts, Tier 3 and 4 towns, and rural areas.
- Improved competitiveness: The scheme aims to help the industry become more competitive and achieve scale and size.
- Increased exports: The scheme focuses on enhancing India’s manufacturing capabilities and exports, with the industry aiming for US$50 billion in exports
- India’s dominant status in global textiles trade: The scheme will give a major push to growing high value MMF segment which will complement the efforts of cotton and other natural fibre-based textiles industry in generating new opportunities for employment and trade, resultantly helping India regain its historical dominant status in global textiles trade.
- Improved efficiencies: The scheme can help improve efficiencies in sectors such as infrastructure, water, health and hygiene, defense, security, automobiles, and aviation.
Definitions
Technical Textiles: The technical textiles segment is a new age textile, whose application in several sectors of economy, including infrastructure, water, health and hygiene, defense, security, automobiles, aviation, etc. will improve the efficiencies in those sectors of economy. The government has also launched a National Technical Textiles Mission in the past for promoting R&D efforts in that sector. PLI will help further, in attracting investment in this segment.
Man-made fibers, also known as synthetic fibers, are fibers that are created artificially, rather than occurring naturally. Man-made fibers are tough, durable, elastic, and resistant to chemicals and shrinking.
64 applicants approved
The government has approved 64 applicants under the scheme, with a proposed investment of ₹19,798 crore, projected turnover ₹1.94 crore, and employment generation of 245,362. The first set of applicants will start receiving incentives from 2025-26
What are the different types of investment?
There are primarily two different sets of possible investments with varying incentive structures.
1. First Investment method
A firm or company to any individual should be willing to enter into a contract to invest at least Rs 300 core in the following aspects:
- Plant
- Machinery
- Civil Works
- Land and Administrative costs
2. Second Investment Method
The second part of the investment scheme requires a minimum threshold on Rs 100 crore investments specifically in aspirational districts, rural areas and Tier 2 and Tier 3 towns.
Eligibility Criteria
To be eligible for the PLI scheme for textiles, a company must meet the following minimum investment and turnover requirements:
- Part 1: Minimum investment of INR 300 crore and a minimum turnover of INR 600 crore.
- Part 2: Minimum investment of INR 100 crore and a minimum turnover of INR 200 crore.
Companies must also invest in plant, machinery, equipment, and civil works to produce notified lines of products, such as MMF fabrics, garments, jackets, jerseys, trousers, overcoats, polyester fabric, and nylon furnishing fabrics. The investment must be made in addition to the cost of land and administrative buildings.
Companies that don’t achieve the required turnover target in a given year won’t receive an incentive for that year. However, they may still be eligible for incentives in subsequent years if they meet the target.
How to Apply for the Production Linked Incentive (PLI) scheme for Textiles
To apply for the Production Linked Incentive (PLI) scheme for textiles, you must meet the following requirements:
- Have PAN/GST/DIN credentials
- Declare the specific ITC HS lines/Technical Textiles Products you intend to manufacture
- Meet the minimum value addition requirements within your registered factory premises
- Be willing to invest a minimum amount in plant, machinery, equipment, and civil works
The application process is transparent and based on objective criteria, including:
- Financial capacity
- Relevant experience and technical capacity
- Location of the manufacturing activity
- Investment
- Additional direct employment in the first performance year
- Product line
You can access information about the PLI scheme on the PLI Portal, including required documents and a sample application format.
You can contact PLI Textiles at:
Mr. Sourabh Sharma: Mobile: 93190-19070, Email: [email protected], Phone: 011-4173 2215
Shri. Pankaj Kumar Singh DS: Phone: 011-23061142, Email: [email protected]
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