Production-Linked Incentive (PLI) Scheme for Textile Sector

The government of India has approved the production-linked incentive (PLI) schemes for the textiles sector to boost domestic manufacturing and exports of man-made fibers (MMF), garments, and technical textiles. Under the scheme incentives worth Rs 10,683 Crores will be provided over 5 years for manufacturing this product. PLI scheme will help further, in attracting investment in this segment. The current article briefs the production-linked incentive scheme for the textile sector in detail.

Production-Linked Incentive Scheme

To boost domestic manufacturing and cut down on import bills, the union government in March 2020 introduced a PLI scheme that aims to give companies incentives on incremental sales from products manufactured in domestic units.

Apart from inviting foreign companies to set shop in India, the scheme also aims to encourage local companies to set up or expand existing manufacturing units.
The Scheme has also been approved for sectors such as automobiles, pharmaceuticals, IT hardware including laptops, mobile phones & telecom equipment, white goods, chemical cells, food processing, etc.

Aim of PLI Scheme for Textile Sector

Production-Linked Incentive (PLI) Scheme for Textile Sector aims to promote the production of high-value Man-Made Fibre (MMF) fabrics, garments, and technical textiles.

Benefits of PLI Scheme for Textile Sector

Benefits of PLI Scheme for Textile Sector is listed as follows:

Production-Linked Incentive (PLI) Scheme for Textile Sector will lead to a fresh investment of more than Rs.19,000 crore, cumulative turnover of over Rs. 3 lakh crore and 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 the formal economy.
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 incentivized to move to backward areas.
This scheme will positively impact especially States like Gujarat, UP, Maharashtra, Tamil Nadu, Punjab, AP, Telangana, Odisha, etc.

Incentive Offered

As part of the PLI Scheme for Textile Sector, Incentives worth Rs 10,683 crore will be provided on production to the textile sector over a span of 5 years.

Incentive structure

There are two types of investment possible with a different set of incentive structure First part: Any person, (which includes firm/company) willing to invest minimum Rs.300 Crore in Plant, Machinery, Equipment and Civil Works (excluding land and administrative building cost) to produce products of Notified lines (MMF Fabrics, Garment) and products of Technical Textiles, shall be eligible to apply for participation in the first part of the scheme. Second part In the second part, any person, (which includes a firm/company) willing to invest a minimum of ?100 Crore shall be eligible to apply for participation in this part of the scheme. 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 incentivized to move to the backward area.

Other Features of PLI for Textile Sector

PLI scheme for Textiles will promote the production of high-value MMF fabrics, Garments, and Technical Textiles in the country.

The incentive structure has been so formulated that the industry will be encouraged to invest in fresh capacities in these segments.
This will give a major push to the growing high-value MMF segment which will complement the efforts of the cotton and other natural fiber-based textiles industry in generating new opportunities for employment and trade, resultantly helping India regain its historical dominant status in global textiles trade.

The Technical Textiles segment is a new age textile, whose application in several sectors of the economy, including infrastructure, water, health and hygiene, defense, security, automobiles, aviation, etc. will improve the efficiencies in those sectors of the economy. The government has also launched a National Technical Textiles Mission in the past for promoting R&D efforts in that sector. Click here to know more about Production-Linked Incentive (PLI) Scheme for Textile Sector

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