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Government issues guidelines for textile sector PLI scheme

News: The government has issued operational guidelines for the Production Linked Incentive (PLI) Scheme for the textiles sector with an approved outlay of Rs.10,683 crore. The scheme will be in operation from September 24, 2021 to March 31, 2030 while the incentive under the scheme will be payable for five years only. The ministry will accept online applications under the scheme from January 1, 2022, through the PLI portal. The application window will remain open till January 31, 2022.

Views: The PLI scheme is set to provide incentives to eligible producers in two phases. In case of large projects, companies/entities willing to invest in manufacturing notified products (manmade fabrics, garments and specified technical textile products) will have to invest minimum | 300 crore and for smaller projects there would be a minimum investment threshold of | 100 crore ( excluding land and administrative building cost). The companies/entities should generate a turnover of 2x the investment in the first performance year (FY25) to be eligible for the subsidy. The incentive rate for large projects would be 15% in the first performance year and for smaller projects it would be 11%. The PLI scheme will provide a boost to domestic manufacturing by attracting more investment in the textile sector and prepare the industry for garnering larger market share in global markets.

Impact: Positive