Union Cabinet Approves ₹10,683 crore PLI Scheme For Textile Sector

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The Union Cabinet today (Sep 8) approved a ₹10,683 crore Production Linked Incentive (PLI) scheme for the textile sector, which covers items from the MMF (man-made fibre) and the technical textiles sectors.

India is currently a laggard in MMF textile trade due to high raw material cost, high tariff barriers and cheap imports from neighboring countries.

PLI scheme is expected to cover approximately 40 product categories under MMF and about 10 in the technical textile segment. It will incentivise both brownfield and greenfield investments in the sector

The Union Cabinet today (Sep 8) approved a ₹10,683 crore Production Linked Incentive (PLI) scheme for the textile sector, which covers items from the MMF (man-made fibre) and the technical textiles sectors.

The scheme will be implemented by Piyush Goyal-led Ministry of Textiles (MoT).

NDA government has already approved PLI schemes in 13 key sectors for enhancing India's manufacturing capabilities and exports. The union budget 2021-22 had allocated an outlay of Rs. 1.97 lakh crore for various PLO schemes. PLI schemes in sectors like electronic manufacturing and pharmaceuticals are already operational.

The PLI scheme is expected to help attract additional investment by existing companies in the MMF and technical textile sectors and usher in new investments by Indian and multinational companies in this segment.

In an official statement, the government said that the PLI Scheme for Textiles will lead to fresh investment of more than Rs.19,000 crore and could potentially help achieve a cumulative turnover of over Rs.3 lakh crore.

The government also estimates that the incentive scheme will help create additional employment opportunities of more than 7.5 lakh jobs in textile sector and several lakhs more in allied activities.

The scheme aims to enhance India’s manufacturing capabilities by increasing investment and production in the textile sector, especially in the MMF segment and technical textiles under greenfield and brownfield investments.

The government also hopes that incentives offered under the PLI scheme will create select group of world-class global champion companies in MMF and technical textile segments, which have the potential to grow, both in size and scale, using cutting-edge technology and thereby penetrating global value chains.

Indian textiles and apparel industry is among the largest in the world, and is a key contributor to the country's export basket, contributes to about 12% of export earnings.

Along with existing schemes like RoSCTL, RoDTEP and other measures by government including providing raw material at competitive prices, specially-designed skill development, the government hopes that the newly-unveiled PLI scheme will give a fillip to the sector.

India is currently a laggard in MMF textile trade due to high raw material cost, high tariff barriers and cheap imports from neighboring countries.

Scheme Coverage And Details

PLI scheme will cover approximately 40 product categories under MMF and about 10 in the technical textile segment.

MMF is likely to cover product categories like jerseys, pullovers, trousers and shirts of man-made fibres. The technical textile category is set to cover products like diapers, adhesive dressings, bandages and safety airbags.

"The Technical Textiles segment is a new age textile, whose application in several sectors of economy, including infrastructure, water, health and hygiene, defense, security, automobiles, aviation, etc. will improve the efficiencies in those sectors of economy. Government has also launched a National Technical Textiles Mission in the past for promoting R&D efforts in that sector. PLI will help further, in attracting investment in this segment." the official press release by the government said.

Incentive Offered

The scheme will provide incentives to both greenfield and brownfield investments and is expected to be in range of 3% to 11% of the incremental revenues’ year-on-year for five years.

The scheme will incentivise two types of investment with different set of incentive structure.

  • Any firm / company) willing to invest minimum ₹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,

  • Any firm/company willing to invest minimum ₹100 Crore shall be eligible to apply for participation in this part of the scheme.

The scheme will prioritise incentives for firms willing to invest in aspirational Districts, Tier 3, Tier 4 towns, and rural areas

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