Expansion of textiles PLI to garments likely put on hold
Launched in 2021, the PLI scheme for textiles allocated a budget of Rs 106.83 billion over five years to encourage the production of man-made fibre (MMF) apparel and fabrics, among other products.
The Centre has reportedly paused its plans to extend the production-linked incentive (PLI) scheme for textiles to include garments, as it aims to prioritise the effective utilisation of the existing scheme.
The official noted that the textiles sector has been underperforming among the 14 sectors covered by the flagship initiative, which seeks to promote domestic manufacturing and reduce reliance on imports. The official explained that the government prefers to focus on improving the scheme’s utilisation rather than making significant modifications or expansions. The concern, they added, is that expanding or tweaking the scheme may lead to increased demands for similar incentives across other sectors, which the government wants to avoid.
In 2024, Giriraj Singh, Textiles Minister, had stated that the government was considering extending the PLI scheme to garments to enhance domestic production and exports. However, no decision has been made on this proposal.
Launched in 2021, the PLI scheme for textiles allocated a budget of Rs 106.83 billion over five years to encourage the production of man-made fibre (MMF) apparel and fabrics, among other products. The scheme was projected to attract fresh investments exceeding Rs 190 billion and generate over 7.5 lakh jobs during this period. Thus far, 74 applicants have been approved under the scheme, with an estimated incentive value of Rs 70.86 billion.
Introduced in 2020 to boost local manufacturing, the overall PLI scheme spans 14 key sectors with a total outlay of Rs 1.97 trillion. However, data shows that disbursements under the scheme amounted to only Rs 97.21 billion by FY 2023-24. Sectors such as automobiles, large-scale electronics, white goods, specialty steel, and solar photovoltaic modules are among those included in the initiative.
In FY 2023-24, the PLI schemes facilitated investments worth Rs 1.46 trillion, production or sales of Rs 12.50 trillion, exports amounting to Rs 4 trillion (approximately $48 billion), and direct and indirect employment for 9.5 lakh individuals. Despite these achievements, the scheme’s performance has been uneven, with sectors like large-scale electronics achieving remarkable success while others, such as steel and textiles, lag behind.
News source: Moneycontrol
