The Production Linked Incentive (PLI) scheme for textiles, which is being further reviewed by the government to possibly include more products, could have a lower minimum investment and turnover criteria to allow smaller entities to be eligible for it, said officials.
“The Textile Ministry’s proposed expansion of the PLI scheme to include all garments, including those made of cotton, will be more effective if the minimum investment and turnover criteria are lowered. The revised proposal being worked out is taking this into account,” an official tracking the matter told businessline.
The PLI scheme for the textiles sector, launched in 2021 with an approved outlay of ₹10,683 crore, is so far extended only for the production of man-made fibers (MMF) apparel, MMF fabrics, and products of technical textiles.
The scheme was re-opened last year as the initial round did not attract enough investments to use up the entire earmarked outlay. While the industry had been pushing for the inclusion of cotton garments in the scheme and lowering the criteria for minimum investment and turnover, no changes were made to the scheme when applications were invited for the second round.
“Even after the application window was opened for the second time, enough investments did not flow in. That is why the Textiles Ministry is now working on changing the conditions of the scheme to make it more accessible and attractive to investors,” the official said.
Textiles Minister Giriraj Singh recently announced that the PLI scheme may be expanded to cover all garments, ending speculations on the matter. “If the PLI scheme is indeed expanded to cover garments made of all fibres, including cotton, the minimum investment and turnover criteria have to be brought down as garment manufacturing units are generally of smaller scale,” the official said.
The existing scheme is divided into two parts, with a minimum investment criteria of ₹100 crore and a minimum turnover criteria of ₹200 crore for the first part and a minimum investment criteria of ₹300 crore and a minimum turnover criteria of ₹400 crore for the second. The incentive offered is higher for entities choosing the higher investment and turnover criteria.
However, the proposed changes to the scheme can only be executed after the necessary approvals are received.
“Firstly, the Textile Ministry has to be convinced in-house about the proposed changes, and the Textiles Minister has to give his consent. Then the Finance Ministry’s approval needs to be sought,” the official pointed out.