Union Textile ministry has released the draft for the muchexpected PLI 2.0 scheme for Apparel & Home Textile sector.
We strongly believe that TN Textile & Apparel sector should use this opportunity & invest in PLI 2.0 to build scale and competitiveness.
Some of the positive reasons for us to believe in the usefulness of this scheme:
1. Investment criteria is within many of our SME companies’ limits of 15cr, 30cr and 45cr in 3 different schemes
2. Minimum turnover condition is also more suitable to our region’s companies – importantly, all kind of Textile manufacturing companies can apply.
3.Companies working with PLI scheme can get good mileage with Domestic & International buyers due to its visibility
4. Companies taking up projects with PLI scheme can also take State Govt incentives (TN state textile policy has some attractive schemes). Companies can combine both to improve the incentive component
5. Incremental sales condition for 5 years can help our SMEs to build much needed Scale & competitiveness
6.If 20 plus companies are executing projects together as a group, companies can get benefits in terms of project cost due to joint purchases.
7. Scheme is open for all products including cotton (61,62 and 63 HS codes.) This will create opportunity for companies to choose their preferred products.
8. Companies have a good gestation period also to kick-start the operations
9. The scheme brings around Rs4300 crores of incentives to the eco system and may generate Rs 1 lakh crore worth of new manufacturing which is good for the Sector and also for new employment generation
10. Standalone apparel companies, semi integrated, integrated companies and spinners – all can explore these new investments. It’s an opportunity for TN textile sector to get more on value addition. Revenue from both export & domestic, are acceptable in this scheme.
Way Forward:
With the expertise & deep knowledge of KPMG, a professional agency, we conducted this interactive session with the 50 Textile Entrepreneurs of our western region (Coimbatore, Tirupur, Erode, Karur Namakkal) to explain the fine details of the scheme with practical working models in various formats.
Such presentation & group interactions will guide the entrepreneurs in doing their own home work to take a call on applying for the project.
Need for Tweaks in the scheme:
During our internal discussion, we identified few important changes required in the scheme in the areas of No. of machines, Differentiations between Apparel & Home Textile, Incentive %, Inclusion of Tech intervention & few Infra in the project cost etc.
With today’s meeting inputs, we are proposing to appoint KPMG to prepare a professional report and ITF & KPMG will jointly submit the report to Union Textile Ministry in one-week time as industry feedback from TN.
PLI theme itself is a structural change in incentivizing new investments; and we are confident about more interest from our region because of SME & Cotton focused PLI scheme.
We urge all Textile companies in our region to deeply study and explore the PLI 2.0 scheme and we are sure that the same will help us in using the China plus One opportunity.
