In a significant break from the past, the second issue of the production-linked incentive (PLI 2.0) scheme for the textiles sector, with a likely focus on garments, made-ups and accessories, may just not be restricted to items made of man-made fibre (MMF) and technical textiles, but also be extended to those made of cotton and other raw materials, said sources.

“There is a major demand from the industry for the inclusion of cotton in the scheme as it is strong in the area and wants to gain greater share of the global market. Cotton garments and accessories also account for the maximum employment generated in the sector. So, the government is seriously considering the matter,” the source said.

Under the first edition of the scheme — that was approved with a financial outlay of ₹10,683 crore for incentivising investments in MMF apparel, MMF fabrics and products of technical textiles — 64 companies were selected. Based on their investments and turnover projections, the Textile Ministry has estimated that a little over ₹6,000 crore of the outlay would be used up as incentives, leaving about ₹4,200 crore to be used as outlay for PLI 2.0.

The proposed PLI 2.0 for garments and made-ups, which will be first put up for Expenditure Finance Committee’s clearance before going to the Cabinet for approval, is likely to have a lower investment and turnover requirement for qualifying for incentives. This is because investment in garments is relatively less even though output to investment ratio is pretty high, the source added.

“In PLI 2.0, the minimum investment requirement for getting various levels of incentives could be ₹15 crore, ₹30 crore and ₹45 crore with double turnover,” he said.

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