A significant milestone has been reached for India’s textile industry as the first set of incentive payments are set to be disbursed under the Production-Linked Incentive (PLI) scheme.
The PLI scheme, launched in 2021 with a budgetary outlay of Rs 10,683 crore, is intended to boost domestic manufacturing of man-made fabric (MMF), garments, and technical textiles. While the scheme initially faced a lukewarm response from private players, recent developments indicate a positive trajectory.
According to a senior government official, approximately 40 companies have grounded investments under the PLI scheme. The official expressed optimism that 10-12 companies would receive incentive payouts in the current financial year. This progress is particularly noteworthy given the concerns raised earlier this year by a Cabinet secretary-led committee regarding the shortfall in investment progress in the textiles sector.
The textiles ministry’s guidelines for the PLI scheme were released in December 2021, but the government received only 64 applications with commitments totalling around Rs 6,000 crore. Some players expressed reluctance to invest in certain textile categories due to a lack of expertise.
MMF, which includes viscose, polyester, and acrylic, constitutes a significant portion of India’s apparel exports, accounting for approximately a fifth. Technical textiles, on the other hand, represent a burgeoning sector with applications in various industries, including aviation, defence, and infrastructure. Examples of technical textiles include personal protective equipment (PPE) kits, airbags, and bullet-proof vests.
To further strengthen the textile industry, the textile ministry has sought Cabinet approval for a second PLI scheme specifically focused on apparel. This new scheme is expected to have a budget of Rs 4,000 crore, utilising unspent funds from the initial PLI scheme. The second edition will also place a particular emphasis on micro, small, and medium enterprises.
