Cabinet PLI scheme textiles (Sunil Ghosh)
Cabinet PLI scheme textiles (Sunil Ghosh)

Cabinet approves over 10k crore PLI scheme for textiles firms

The 10,683 crore PLI scheme for textile is part of the 1.97 lakh crore boost for 13 sectors announced in the Union budget
By Rajeev Jayaswal, Hindustan Times, New Delhi
UPDATED ON SEP 09, 2021 05:23 AM IST

The Cabinet on Wednesday approved 10,683 crore production-linked incentive (PLI) scheme for domestic technical textiles firms, and manufacturers of fabrics and apparels in the man-made fibre segment provided they make specific investment in greenfield projects and achieve stipulated turnover -- a move aimed at boosting investments in the labour-intensive sector, as also exports.

Providing details of the scheme textiles minister Piyush Goyal said, “PLI is a visionary scheme of Prime Minister Narendra Modi and textile industry is one such industry that creates maximum employment opportunities for every single rupee invested [in the sector].”

According to government estimates, the scheme will attract fresh investments of at least 19,000 crore in five years and result in a cumulative turnover of over 3 lakh crore with additional employment generation of around 7.5 lakh jobs in the textile sector, particularly in the man-made fibre (MMF) and technical textiles segment . MMF is synthetic fibre as against cotton, which is a natural fibre. Technical textiles are used for technical properties rather than aesthetic, for example agro-textiles, geo-textiles, sports-textiles and medical textiles, including personal protective equipment (PPE) kits.

“Through the PLI Scheme in textiles, India seeks to emerge as a hub for global textiles manufacturing. The PLI scheme will further women empowerment and accelerate progress in the aspirational districts,” Prime Minister Modi said in a tweet. He added that the textiles sector plays a vital role in the economy and the scheme will give “a further boost to the sector and strengthen our endeavour to create an Aatmanirbhar Bharat”.

The 10,683 crore PLI scheme for textile is part of the 1.97 lakh crore boost for 13 sectors announced in the budget; this includes sectors such as automobile, pharmaceuticals, telecom, speciality steel, white goods and solar modules.

Goyal, also the union trade minister, said India has significant global presence in the cotton textile segment, but the MMF segment needs special incentives to achieve the scale. “Man-made textiles and technical textiles have huge demand in international market and these segments are growing very fast, and today, they constitute two-thirds of the total textile trade. This PLI scheme is specially approved so that India will also scale up its share in man-made fibres, and technical textile segments.”

According to the textile ministry manufacturers have two options to avail the incentive. One option pertains to 300 crore investments in a greenfield project in two fiscal years (2022-24) and a turnover target of 600 crore to get a 15% PLI, which comes to 90 crore. The other option is to invest 100 crore in two financial years and achieve a turnover target of 200 crore to get 11% PLI, which amounts to 22 crore.

Vijoy Kumar Singh, additional secretary in the textile ministry said applicants will be evaluated on objective criteria and that about 70-75 textile units will get established under this scheme. He said the proposals setting up units in aspirational districts will get priority.

He added that existing manufacturers can also get PLI benefits provided they set up separate greenfield units for the purpose.

Explaining the rationale of two investment options of 300 crore and 100 crore, he said: “While garment manufacturing is not that capital intensive, more investments are required in fabric processing units.”

Federation of Indian Export Organisations (FIEO) president A Sakthivel called the move “a game changer” for the textiles industry. “Global MMF market is about $200 billion and India should aim to get 10% of the market in the next five years. The scheme will help in realigning our exports strategy which so far has been dependent on cotton products to move to man-made and technical textiles which together account for roughly two-thirds of the global trade in textiles,” he said. MMF apparel currently account for 20% of India’s overall apparel exports and the country should aim to increase its share to 50% in next five years, he added

“Considering the fact that states like Gujarat, UP, Maharashtra, Tamil Nadu, Punjab, AP, Telangana, Odisha, etc., are extensively engaged in the textile exports sector, such states will particularly benefit from the PLI scheme,” said Arvind Sharma, partner at law firm Shardul Amarchand Mangaldas & Co.

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