The Centre said it has decided to re-open the portal for inviting fresh applications from interested companies under the Production Linked Incentive (PLI) scheme for Textiles till August 31, 2023 in view of requests from industry stakeholders.

PLI scheme for textiles

• The government had approved the PLI scheme for textiles products like man-made fibre (MMF) apparel, MMF fabrics and products of technical textiles for enhancing manufacturing capabilities and boosting exports with an approved financial outlay of Rs 10,683 crore over a five-year period.

• The incentive structure has been so formulated that industry will be encouraged to invest in fresh capacities in these segments. This 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.

• It is estimated that over the period of five years, the PLI scheme for textiles will lead to fresh investment of more than Rs 19,000 crore, cumulative turnover of over Rs 3 lakh crore will be achieved under this scheme and, will create additional employment opportunities of more than 7.5 lakh jobs in this sector and several lakhs more for supporting activities.

• The textiles industry predominantly employs women, therefore, the scheme will empower women and increase their participation in formal economy.

• The government is targeting to increase exports of technical textiles from $2 billion to about $8-10 billion.

• There are two types of investments with different sets of incentive structures. 

• The Part-1 includes any company willing to create a separate manufacturing company under Companies Act 2013, and invest minimum Rs 300 crore (excluding land and administrative building cost) to manufacture notified products. Such companies will be eligible to get incentive when they achieve a minimum of Rs 600 crore turnover by manufacturing and selling the notified products by the first performance year.

• The Part-2 includes companies willing to create separate manufacturing company under Companies Act 2013, and invest minimum Rs 100 crore (excluding land and administrative building cost) to manufacture notified products. Such company will be eligible to get incentive when they achieve a minimum of Rs 200 crore turnover by manufacturing and selling the notified products by the first performance year.

• In addition, priority will be given for investment in Aspirational Districts, Tier 3, Tier 4 towns, and rural areas and due to this priority Industry will be incentivised to move to backward areas. This scheme will positively impact states like Gujarat, Uttar Pradesh, Maharashtra, Tamil Nadu, Punjab, Andhra Pradesh, Telangana, Odisha, etc.

• The scheme would help increase India’s share in the global man-made fibre and technical textiles sector.

PLI schemes

An outlay of Rs 1.97 lakh crore has been announced in Union Budget 2021-22 for Production Linked Incentive (PLI) schemes for 13 key sectors for a period of five years starting from FY 2021-22.

These sectors are:

1) Mobile manufacturing and specified electronic components (Large scale electronics manufacturing)

2) Critical key starting materials/drug intermediaries & active pharmaceutical ingredients

3) Manufacturing of medical devices 

4) Automobiles and auto components

5) Pharmaceuticals

6) Specialty steel

7) Telecom and networking products

8) Electronic/technology products

9) White goods (ACs and LEDs)

10) Food products

11) Textile products: man-made fibre (MMF) segment and technical textiles

12) High efficiency solar PV modules

13) Advanced Chemistry Cell (ACC) battery.

• In September 2021, the Union government approved a PLI scheme for drones and drone components with an allocation of Rs 120 crore spread over three financial years.

• The objectives of PLI schemes are to make manufacturing in India globally competitive by removing sectoral disabilities, creating economies of scale and ensuring efficiencies.

• It is designed to create a complete component ecosystem in India and make India an integral part of the global supply chains. 

• The schemes are expected to attract global investments, generate large scale employment opportunities and enhance exports substantially.

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