The Union Ministry of Textiles is reconsidering the products shortlisted so far for qualification under the production-linked incentive (PLI) scheme for the textiles sector.
The Ministry is looking at including inputs such as fabrics and filaments in both the man-made fibre (MMF) and technical textiles categories to incentivise more value addition in the country.
So far mostly end products have been considered for the PLI scheme both for MMF and technical textiles categories. These include items such as garments, sweaters, diapers and sanitary napkins.
However, it has been pointed out by the industry and experts that just including end products may not optimally encourage manufacturing and investments. It is also important to include inputs such as fabrics and filaments used for making the end product to give a boost to investments and production.
Textiles is one of the 13 sectors for which the Centre has announced the PLI scheme to enhance India’s manufacturing capabilities and exports. The textile sector has been allocated Rs 10,683 crore under the scheme which, as per initial plans of the Ministry, will be offered for incremental production in 40 identified manmade fibre items and 10 technical textiles products over five years.
The Textile Ministry is now taking a relook at the scheme to finalise the list of items that would be eligible and considering the option of including fabrics, fibres and filaments in the revised list.
A lot of work has already gone into the reconsideration and whatever the decision might be on new products, the Textile Ministry is expected to notify the scheme soon.
There is also a demand from the industry to lower the turnover threshold for eligibility under the scheme to include smaller players as well.
As per the initial plans, for brownfield companies (companies already in operation) the incentive rates were reportedly proposed to be fixed at nine percent of turnover in the first year for companies with a turnover of Rs 100-500 crore (for 50 percent incremental turnover) and seven percent for those above that. In the subsequent four years it would keep decreasing.
For greenfield projects (new set ups), a minimum investment of Rs 500 crore was reportedly proposed with incentives at 11 percent to start with.
However, the industry has pointed out that it may be difficult for most companies to meet the Rs 500 crore criteria as most companies in India do not invest in the entire value chain such as from yarn to garments and therefore, the threshold needed to be lowered.
The Textile Ministry is also taking a relook at the condition of achieving 50 percent growth on a year-to-year basis.