The second edition of the production-linked incentive (PLI 2.0) scheme for textiles is likely to have an outlay of ₹4,307 crore and will cover manufacture of garments, made-ups and textiles accessories of all materials, natural or man-made, per the Cabinet note finalised by the Textiles Ministry.

“A Cabinet note, together with guidelines, for PLI scheme for apparel/garments, made-ups and textiles accessories, with an outlay of ₹4,307 crore, has been finalised and circulated to the Prime Minister’s Office and the Cabinet Secretariat,” an internal note of the Textiles Ministry stated.

While the existing edition of the PLI scheme for textiles, introduced in 2021, is limited to production of man-made fibre (MMF) fabrics and apparels and technical textiles, the second edition being proposed will be open for garments, made-ups and accessories of all materials including cotton, a source tracking the matter told businessline.

“The government decided to go in for second edition of PLI for textiles as the total corpus of ₹10,683 crore allocated for the scheme will not get used up as incentives for the 64 selected applicants under the first phase. Going by estimates, just a little over ₹6,000 crore will be used,” the source said.

Larger participation

The objective of the proposed PLI 2.0 is to enhance India’s manufacturing capabilities in value added finished textile products which, by nature, requires low investment but has high employment generation capacity, according to another note.

Also read: Textiles PLI 2.0 likely to attract smaller players by early 2023, say officials

The proposed minimum investment and turnover criteria is, therefore, considerably lower under the proposed scheme so that even MSMEs can participate. “The qualifying investment under the proposed scheme is likely to be in the ₹15-45 crore range, with minimum prescribed turnover of ₹30-90 crore, to earn incentives ranging between 8 per cent and 10 per cent,” the source said.

The government may also do away with the condition of setting up of a new company to be eligible for the scheme. Instead, it may allow all companies registered in India to participate under conditions such as maintenance of separate accounts and counting investments in only new machines towards eligibility, sources said.

Once the Cabinet approves the proposal, the PLI 2.0 scheme for textiles can be announced and implemented.