The Textile Ministry is working to finalise the second edition of the Production Linked Incentive (PLI) scheme for garments, made ups and home textiles, with lower minimum investment and turnover requirements to attract small and medium entities, by early next year, officials said.
“The incentives on offer may slightly be lower than what was offered under PLI 1. But the scheme would still be attractive,” an official told businessline.
First edition
The PLI scheme for textiles (first edition), introduced in 2021, is divided into two parts and is available for the production of man-made fibre (MMF) fabrics and apparels as well as technical textiles.
The minimum investment requirement for the first part is ₹300 crore with a minimum turnover requirement of ₹600 crore. Investors are entitled to an incentive of 15 per cent of the minimum turnover in the first year, which is to go down by 1 per cent over the next four years.
Part two requires a minimum investment of ₹100 crore, with a minimum turnover requirement of ₹200 crore. The incentive here is lower at 11 per cent in the first year, which is to be reduced by 1 per cent over the next four years.
Cotton items
“The second edition of the PLI scheme will be available to cotton items also . The minimum investment requirement for getting various levels of incentives is likely to be much lower with three different thresholds of ₹15 crore, ₹30 crore, and ₹45 crore with double turnover requirement,” an industry source said.
As the budget for incentives under the scheme, fixed at ₹10,683 crore, is more than what would be utilised as pay-outs to the 64 short-listed investors, the excess of about ₹4,000 crore is to be utilised as incentives under PLI 2.0
Incentives offered
The incentives offered to manufacturers under PLI 2.0 is still under discussion and likely to be slightly lower than the first edition, the official added.
The Textile Ministry has approved 64 applications under first part of the scheme with a proposed total investment of ₹19,798 crore and a projected turnover of ₹1,93,926 crore.
“Of this, around 32 applicants have already started setting up operations and have brought in about ₹1,500 crore-₹1,700 crore. Some have already started getting orders,” the official said.