The Ministry of Textiles, Government of India, has released a draft on second round of production-linked incentive (PLI 2.0) scheme for the textile sector. The draft states that textile units can produce apparel, home textiles and textile accessories like embellishments, zippers, trimmings, and elastic tapes (under HS codes 61, 62 and 63) under the scheme.
Participating companies need to complete their investment during the two-year gestation period, i.e., 2022-23 and 2023-24. The required turnover has to be achieved from the subsequent year, i.e., 2024-25.
For apparel and home textiles, the required minimum investment is Rs. 15 cr (minimum 1,000 machines) or Rs. 30 cr (minimum 2,000 machines) or Rs. 45 cr (minimum 3,000 machines). The annual turnover from the new investment should be Rs. 30 cr, Rs. 60 cr or Rs. 90 cr, respectively. The qualifying investment and turnover for textile accessories is Rs. 10 cr and Rs. 20 cr respectively. Around Rs. 4,300 cr of incentives will be provided by the government under the scheme, which is expected to generate new manufacturing estimated at Rs. 1,00,000 cr. The scheme has an incremental sales condition for five years, which is expected to help small and medium enterprises (SMEs) build the much-needed scale and competitiveness.
Further, if more than 20 companies are investing in projects together as a group, those companies can apply for benefits in terms of project cost due to joint purchases. The scheme is open to all manufacturers—both exporters and sellers in the domestic market—that meet the requirements laid in the draft.
Coimbatore-based Indian Texpreneurs Federation (ITF) has however suggested that the condition in the number of machineries required should be differentiated between apparel, home textiles, and accessories.
Earlier in April this year, the Selection Committee chaired by Secretary, Ministry of Textiles, UP Singh, selected 61 applicants under Production Linked Incentive (PLI) Scheme (now PLI 1.0) for textiles. In the 61 applications approved, the proposed total investment expected from the applicants is Rs. 19,077 cr and a projected turnover is Rs. 184,917 cr over a period of 5 years with a proposed direct employment of 240,134.
PLI 1.0 for textiles products, namely MMF apparel, MMF fabrics and products of technical textiles, has two parts, Part 1 where minimum investment is Rs. 300 cr and minimum turnover required to be achieved for incentive is Rs. 600 cr; and Part-2, where minimum investment is of Rs. 100 cr and minimum turnover required to be achieved for incentive is Rs. 200 cr.
The approved financial outlay for PLI 1.0 is Rs. 10,683 cr over a five-year period.
