The Indian government is contemplating an extension of its ₹10,683-crore Production Linked Incentive (PLI) scheme for the textiles sector, potentially adding one to two years to the current timeline, which is set to conclude in FY2028-29. This decision aims to attract more companies and ensure that the allocated funds are fully utilized,as many participating firms are still in the early stages of investment and project implementation.
Launched in 2021,the textile PLI scheme seeks to enhance domestic manufacturing of man-made fibre (MMF) apparel, MMF fabrics, and technical textiles. India has historically struggled to compete in these areas against countries like China,Vietnam, and Bangladesh. So far, only around ₹400 crore has been disbursed under the scheme, indicating that many approved projects have yet to reach the point where incentive payouts are applicable.
Officials believe that extending the scheme would allow companies additional time to finalize their investments and begin production. This,in turn,could entice new participants to join the program. Industry feedback has reportedly been positive,and the government remains receptive to the idea of introducing further incentives if necessary.
The PLI framework incentivizes companies based on incremental production and investment targets,with the overarching goal of expanding manufacturing capacity, boosting exports, and creating jobs. The textile initiative is part of a broader PLI program,which encompasses 14 sectors and has seen the Union government commit over ₹1.97 lakh crore since its inception in FY2021-22. This initiative aims to fortify India's manufacturing landscape,decrease reliance on imports, and establish the nation as global production hub.
Manufacturing facilities associated with approved projects under the textile PLI scheme are distributed across 150 districts in 24 states. Sources indicate that the full allocation for the textile scheme is anticipated to be utilized by the end of the program,reflecting a commitment to enhancing the sector's capabilities.
