The Union Cabinet, led by Prime Minister Narendra Modi, approved the production-linked incentive (PLI) scheme for the textiles sector on Wednesday. A package of Rs 10,683 crore to boost domestic manufacturing of man-made fibres (MMF), garments, and technical textiles was announced as part of the scheme.

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The PLI scheme — aimed to push the vision of an ‘Aatmanirbhar Bharat’ — comes at a time when India's share of textile exports has declined over the years with nations like Bangladesh and Thailand racing ahead.

What is the PLI scheme?

The production-linked incentive is aimed at expanding MMFs and technical textiles' value chain. The objective of the scheme is to help India gain a dominant status in the global textile trade.

The scheme will create "additional employment opportunities of more than 7.5 lakh jobs in this (textiles) sector and several lakhs more for supporting activities", said the communique from the government.

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Under the PLI scheme, the government has pledged to make greenfield (new companies being set up) and brownfield (companies that are already in operation) investments.

Which companies will be eligible?

Under the five-year scheme, companies producing over 50 man-made fibre garments and fabrics and a handful of technical textiles products will be eligible for incentives.

"Companies that will set up factories in aspirational districts and Tier-III and Tier-IV will be given priority while allocating incentives," said Union textile minister Piyush Goyal.

Major provisions of the PLI scheme

Under PLI, the Centre will subsidise eligible manufacturers by paying incentives on incremental production. Companies investing over Rs 300 crore in plant, machinery, equipment and civil works to produce the identified products will get an incentive of 15 percent of their turnover, which needs to be Rs 600 crore in the third year.

Besides, the companies investing between Rs 100 crore and Rs 300 crore will also be eligible to receive duty refunds and incentives (lower than 15 percent of their turnover).

The government expects to achieve "fresh investment of over Rs 19,000 crore and a cumulative turnover of more than Rs 3 lakh crore".

The detailed guidelines of the scheme will be announced by the end of this month and applications will open for companies in November and December.

(Edited by : Anshul)

First Published:Sept 9, 2021 3:11 PM IST