PLI Scheme for Textile Sector: Boosting India’s Exports

India’s textile sector has been a vital pillar of the country’s economy for centuries, contributing significantly to employment, exports, and GDP. However, in recent decades, the sector faced increasing competition from countries like Bangladesh, Vietnam, and China, which have lower production costs and more aggressive export incentives.

To counter these challenges and transform India into a global textile manufacturing powerhouse, the Government of India launched the Production Linked Incentive PLI Scheme for Textile Sector in 2021. This flagship program aims to increase local production, stimulate investment in technical textiles and goods made of man-made fiber (MMF), and increase India’s proportion of the world’s textile exports.

In this article, we will explore the details of the PLI Scheme, its objectives, eligibility criteria, incentives offered, and how Cretum Advisory can help textile manufacturers leverage this opportunity for sustainable growth.

What is the PLI Scheme for Textile Sector?

The Production Linked Incentive (PLI) Scheme is a government program aimed at encouraging companies to increase domestic manufacturing capacity by providing direct financial incentives based on incremental sales. The scheme covers multiple sectors, with textiles being a major focus due to their vast employment potential and export value.

Specifically, the textile PLI scheme targets:

Man-Made Fibre (MMF) Fabrics and Garments:

These include synthetic fiber products, polyester fabrics, sportswear, and other value-added apparel.

Technical Textiles:

These are textile products designed for specialized applications such as medical textiles, geotextiles used in construction, agro-textiles for farming, and industrial filtration fabrics. The scheme rewards companies with financial incentives ranging from 7% to 15% on incremental turnover over the base year, encouraging them to scale production and invest in modern, technologically advanced manufacturing units.

Objectives of the Scheme

The PLI Scheme for Textile Sector has several critical objectives:

Boost Domestic Production:

Increase the share of high-value MMF and technical textiles in total textile production.

Promote Value Addition:

Encourage manufacturing units to produce sophisticated textile products instead of just raw fabrics.

Reduce Import Dependency:

India imports a significant portion of synthetic fibers and technical textile products. The scheme aims to reduce this reliance.

Enhance Export Competitiveness:

Position India as a preferred global supplier of value-added textiles.

Generate Employment:

Create millions of direct and indirect jobs, especially in textile hubs like Surat, Tiruppur, Ichalkaranji, and Ludhiana.

Attract Investment:

Draw both domestic and foreign investors to set up or expand textile manufacturing facilities in India.

Budget and Duration

Total Budget Outlay: ₹10,683 crore (approx. $1.4 billion USD)
Implementation Period: 5 years (from FY 2021-22)
Targeted Investment: ₹19,000 crore in new textile manufacturing units Over 5 years, an incremental turnover of ₹3 lakh crore is anticipated.
Creation of Employment: More than 7.5 lakh direct jobs in several states

Eligibility Criteria and Investment Requirements

To participate in the scheme, companies must meet certain investment and turnover thresholds, divided into two parts:

Part 1: Large Investments

Minimum investment of ₹300 crore in plant, machinery, and equipment
Minimum incremental turnover of ₹600 crore during the incentive period

Part 2: MSMEs and Smaller Units

Minimum investment of ₹100 crore
Minimum incremental turnover of ₹200 crore
Both domestic and foreign companies registered in India can apply for the scheme, provided they meet these criteria.

Products Covered Under the Scheme

The scheme primarily focuses on the following product categories:

1 . Man-Made Fibre (MMF) Apparel and Fabrics

Polyester, nylon, and other synthetic fiber-based textiles
Performance and sportswear fabrics
Apparel segments using MMF materials

2. Technical Textiles

Medical textiles (masks, bandages, surgical gowns)
Agro-textiles (crop covers, soil stabilization fabrics)
Geotextiles (used in infrastructure projects)
Industrial textiles (filters, conveyor belts, insulation materials)
Defense and automotive textiles

This focus helps India tap into the growing global demand for specialized textile products beyond traditional cotton or wool fabrics.

Incentive Structure

Incentives are paid as a percentage of the incremental sales of eligible products over a base year turnover.
Rates range from 7% to 15%, depending on product category and year of incentive.
An additional 3% bonus is available for companies sourcing over 60% of raw materials domestically, boosting the local supply chain.
The incentives are disbursed over a 5-year period with a tapering scale encouraging early investment and production ramp-up.

Impact of the PLI Scheme on India’s Textile Sector

Modernization & Automation
With financial incentives available, companies are motivated to upgrade machinery, adopt automation, and improve quality control, leading to higher productivity and competitiveness.
Cluster-Based Development
The scheme encourages setting up or expanding production units in existing textile clusters like Surat (synthetic fabrics), Tiruppur (knitwear), and Ichalkaranji (textiles and garments), facilitating economies of scale.
Export Growth
India aims to increase its global market share in value-added textiles significantly, with expectations of ₹3 lakh crore incremental turnover boosting exports.
Employment Generation
Over 7.5 lakh direct jobs will be created, benefiting skilled and semi-skilled workers, especially in tier 2 and 3 cities.

How Cretum Advisory Supports Textile Businesses in the PLI Scheme?

Navigating government schemes can be complex and time-consuming. That’s where Cretum Advisory comes in. Our expert team offers comprehensive support tailored to textile companies aiming to benefit from the PLI Scheme.

Our Services Include:

Eligibility Assessment & Application Management: We help assess your eligibility, prepare the application, and ensure compliance with all scheme requirements.

Preparation of Detailed Project Reports (DPRs):

Critical for large investments, we craft robust DPRs demonstrating project feasibility and expected outcomes.

Compliance and Documentation:

We assist with maintaining records and submitting timely reports to claim incentives.

GST & Tax Advisory:

Specialized support to textile manufacturing and exports in GST Advisory.

Export Incentive Mapping:

Guidance on aligning PLI benefits with other export promotion schemes.

Factory Setup & Location Advisory:

Support in choosing optimal locations within textile parks or clusters.

Startup and MSME Registration:

Assistance for smaller units to avail benefits under MSME and startup schemes.

Investment & Funding Advisory:

Help in raising capital and accessing government or private funding.

Our proactive strategy guarantees that clients get the most out of the PLI plan with the least amount of administrative burden.

Aspect	Details
Total PLI Outlay	₹10,683 crore
Targeted Investment	₹19,000 crore
Incremental Turnover	₹3 lakh crore
Employment Generation	7.5 lakh direct jobs
Incentive Rate	7-15% + 3% bonus for domestic sourcing
Key Sectors Covered	MMF fabrics, Technical Textiles
Implementation Period	5 years (2021-2026)
Eligible Companies	Domestic & foreign firms

The Final Thought

PLI Scheme for Textile Sector is a game-changer for India’s textile industry, fostering modernization, export growth, and job creation. By focusing on technical textiles and MMF products, the scheme positions India to become a global textile leader.

If you are a textile entrepreneur or manufacturer, now is the time to explore this opportunity. Cretum Advisory stands ready to guide you through the process, ensuring you unlock maximum benefits and accelerate your business growth.

Frequently Asked Questions (FAQs)

Q1: What is the PLI Scheme for the textile sector?

It’s a government incentive program offering financial rewards based on incremental textile production and sales.

Q2: Who is eligible?

Registered Indian companies investing ₹100 crore or more in MMF or technical textiles.

Q3: What products qualify?

Synthetic fiber fabrics, technical textiles like medical and geotextiles, and apparel.

Q4: What benefits are offered?

Incentives of 7-15% on incremental turnover, plus bonus for domestic raw material use.

Q5: How does Cretum Advisory help?

From eligibility checks to compliance and application filing, we provide end-to-end support.