PLI Scheme notified for Man-made Fibers and Technical Textiles sectors

GOI notifies Production Linked Incentive (PLI) scheme worth US$ 1.45 bn, for Man-made Fibers (MMFs) and Technical Textiles Sectors

September 8, 2021

Scheme incentivizes manufacturers by paying 3-11% incentive on incremental production.

Covers 10 technical textile products, 14 manmade fiber (MMF) products and 40 MMF apparel

Covers only those industries contributing 60% to fiber/yarn, 30% to independent fabrics

Smart Textiles also included as products eligible for benefits

The PLI scheme for the man-made fibers (MMFs) and technical textile sectors, worth US$ 1.45 billion over the next five years, was notified by the Government of India on 27 September 2021. The scheme is expected to boost India’s domestic manufacturing of the new-age textile fibers, thus re-positioning India as the one of the largest exporting countries in the world for apparels and textiles. The scheme has been approved for MMF apparel, MMF fabrics and technical textiles. The scheme will cover 10 technical textile products, 14 manmade fiber (MMF) products and 40 MMF apparel. It will incentivize only those companies which contribute 60% value addition in integrated fiber/yarn to fabric, garment & technical textiles and 30% in case of independent fabrics processing houses.

The scheme is expected to generate nearly 0.75 million jobs in the Indian textile sector, and boost India’s textile exports that have witnessed a considerable decrease in their share of global textile exports, over the years, owing to stiff competition from countries like Bangladesh and Thailand. It is also expected to shift Indian textile manufacturing away from the traditional cotton textiles, and towards the newer-age MMFs that are more sought after globally. As on date, only a fifth of India’s total textile production comprises MMFs.

Aimed at incentivizing eligible manufacturers, the PLI scheme will pay 3-11% incentive on incremental production. Identifying two categories of investments- above US$ 13.59 million and US$ 40.78 million, this scheme prioritizes incentivizing manufacturers based in aspirational districts or Tier-3 and Tier-4 cities, to the direct benefit of states like Gujarat, Uttar Pradesh, Maharashtra, Punjab, Tamil Nadu, Odisha, Telangana and Andhra Pradesh. It covers products such as jackets, jerseys, trousers, overcoats, polyester fabric and nylon furnishing fabrics. Smart Textiles embedded with active devices for medical, defense and special use, are also enlisted as products eligible for benefits under the scheme.