PLI Textiles Review Suggests Lowering Investment and Turnover Criteria

Despite industry demands to include cotton garments and lower the criteria for minimum investment and turnover, no changes were made during the second application round.

Officials have indicated that the Production Linked Incentive (PLI) scheme for textiles is currently under review by the government, with a possible inclusion of more products. This revision may result in lower minimum investment and turnover criteria, allowing smaller entities to qualify.

The Textile Ministry is considering expanding the PLI scheme to encompass all garments, including those made of cotton, and it is believed that reducing the investment and turnover criteria would enhance its effectiveness. An official familiar with the matter revealed that these factors are being considered in the revised proposal.

Launched in 2021 with an approved budget of Rs 106.83 billion, the PLI scheme for textiles has so far been limited to the production of man-made fibres (MMF) apparel, MMF fabrics, and technical textiles products. The scheme was reopened last year after the initial phase failed to attract sufficient investments to utilise the entire budget. Despite industry demands to include cotton garments and lower the criteria for minimum investment and turnover, no changes were made during the second application round.

The official noted that insufficient investments continued even after the second application window was opened, prompting the Textiles Ministry to consider altering the scheme’s conditions to make it more appealing and accessible to investors.

Recently, Textiles Minister Giriraj Singh announced the potential expansion of the PLI scheme to cover all garments, putting an end to speculations. The official emphasised that if the scheme were expanded to include garments made of all fibres, including cotton, the minimum investment and turnover criteria would need to be lowered, as garment manufacturing units are generally smaller in scale.

The current scheme is divided into two segments: the first part requires a minimum investment of Rs1 billion and a minimum turnover of Rs 2 billion, while the second part requires a minimum investment of Rs 3 billion and a minimum turnover of Rs 4 billion. The incentive provided is higher for entities meeting the higher investment and turnover criteria.