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Government Approves PLI Scheme with incentives for Textile Sectors

Taking steps forward towards the vision of an ‘Aatmanirbhar Bharat’, Government led by Hon’ble Prime Minister, Shri Narendra Modi, has approved the PLI Scheme for Textiles for MMF Apparel, MMF Fabrics and 10 segments/ products of Technical Textiles with a budgetary outlay of Rs. 10,683 crore. PLI for Textiles along with RoSCTL, RoDTEP and other measures of Government in sector e.g. providing raw material at competitive prices, skill development etc. will herald a new age in textiles manufacturing. PLI scheme for Textiles is part of the overall announcement of PLI Schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of Rs. 1.97 lakh crore. With the announcement of PLI Schemes for 13 sectors, minimum production in India is expected to be around Rs. 37.5 lakh crore over 5 years and minimum expected employment over 5 years is nearly 1 crore.

PLI Scheme for Textiles & MITRA Parks Scheme is at advance stage of Approval informed Shri Piyush Goyal, Union Minister for Commerce & Industry, Textiles, Consumer Affairs and Public Distribution while interacting with the leaders of Textile Industry in India. He further stated “We must aim to increase textiles exports 3 times from present export value of $33 bn to $ 100 bsssn of textiles exports at the earliest. We must all collectively resolve to reach the target of $ 44 bn of exports in 2021-22 for Textiles & Apparel including Handicrafts”. He also informed that the Textile Ministry is working closely with MOF to resolve the issue of old dues on incentives for Exporters.

PLI scheme for Textiles will promote production of high value MMF Fabric, Garments and Technical Textiles in country. The incentive structure has been so formulated that industry will be encouraged to invest in fresh capacities in these segments. This will give a major push to growing high value MMF segment which will complement the efforts of cotton and other natural fibre-based textiles industry in generating new opportunities for employment and trade, resultantly helping India regain its historical dominant status inglobal textiles trade.

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.

There are two types of investment possible with different set of incentive structure. Any person, (which includes 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, shall be eligible to apply for participation in first part of the scheme. In the second part any person, (which includes firm / company) willing to invest minimum ₹100 Crore shall be eligible to apply for participation in this part of the scheme. In addition, priority will be given for investment in Aspirational Districts, Tier 3, Tier 4 towns, and rural areas and due to this priority Industry will be incentivized to move to backward area. This scheme will positively impact especially States like Gujarat, UP, Maharashtra, Tamilnadu, Punjab, AP, Telangana, Odisha etc.

It is estimated that over the period of five years, the PLI Scheme for Textiles will lead to fresh investment of more than Rs.19,000 crore, cumulative turnover of over Rs.3 lakh crore will be achieved under this scheme and, will create additional employment opportunities of more than 7.5 lakh jobs in this sector and several lakhs more for supporting activities. The textiles industry predominantly employs women; therefore, the scheme will empower women and increase their participation in formal economy.

PLI scheme for Textiles will promote production of high value MMF fabric, garments and technical textiles in the country. The incentive structure has been so formulated that industry will be encouraged to invest in fresh capacities in these segments. This will give a major push to growing high value MMF segment which will complement the efforts of cotton and other natural fibre-based textiles industry in generating new opportunities for employment and trade, resultantly helping India regain its historical dominant status in global textiles trade.

There are two types of investment possible with different set of incentive structures. Any person, (which includes firm / company) willing to invest minimum Rs. 300 crore in plant, machinery, equipment and civil works (excluding land and administrative building cost) to produce products of notified lines (MMF fabrics, garments) and products of technical textiles, shall be eligible to apply for participation in first part of the scheme.

The scheme aims to boost the production of these products and regain India’s position as one of the largest sources of apparels and textiles globally. While India remains one of the largest producers globally, its share of global production and exports have constantly eroded over the past decade as smaller nations like Bangladesh and Thailand have raced ahead. The government wants the scheme to cause a shift from traditional textiles to newer more globally sought-after products. Most apparel manufacturing is increasingly becoming dependent on MMF. The new scheme is expected to help India quickly catch up with competing economies by switching to products and production methods more conducive to consumer tastes and corporate demands.

The share of MMF in India’s traditional textile export basket remains low with only a-fifth of all textile products are MMF while the rest are cotton. Interestingly, globally the trend is the opposite. Earlier, the government had announced a Mega Integrated Textile Regions and Parks scheme (MITRA) to attract large investment and employment generation in the sector to further boost domestic manufacturing and to create world-class infrastructure in one place with plug & play facilities. It will enable the textile industry to achieve size and scale so as to become globally competitive and also create global champions in exports. Under the scheme, 7 Mega Textile Parks will be established over 3 years.

Main points of PLI Scheme;

  1. Government has approved Production Linked Incentive (PLI) Scheme for Textiles. With this, India is poised to regain its dominance in Global Textiles Trade

  2. Leveraging Economies of Scale, the scheme will help Indian companies to emerge as Global Champions

  3. Help create additional employment of over 7.5 lakh people directly and several lakhs more for supporting activities

  4. Scheme will also pave the way for participation of women in large numbers

  5. Incentives worth Rs. 10,683 crore will be provided to industry over five years

  6. It is expected that this scheme will result in fresh investment of above Rs 19,000 crore and additional production turnover of over Rs.3 lakh crore in five years

  7. Higher priority for investment in Aspirational Districts & Tier 3/4 towns

  8. Scheme will positively impact especially States like Gujarat, UP, Maharashtra, Tamil Nadu, Punjab, AP, Telangana, Odisha etc.

Mr. R. K. Vij, Secretary General of Polyester Textile and Apparel Association (PTA) welcomed PLI Scheme and thanked the Textile Ministry and Commerce Ministry for announcing such schemes to promote MMF in India in line with International trend. He said that this scheme will positively impact the states with strong textiles ecosystem. Ultimately it will create more investments, more turnovers, more jobs (especially for women), more export, more domestic consumption and more profits for Man Made Industry. He also further suggested Govt. that in future it should also consider to include products like PSF, DTY, FDY also which are major raw material to produce these value added products specified in the PLI scheme.

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