Commodities

PLI for textiles valid only for firms registered in India

Our Bureau New Delhi | Updated on September 29, 2021

Companies must show minimum 30-60% value-addition

The Production Linked Incentive (PLI) scheme for textiles, with an outlay of ₹10,683 crore, will be open only to manufacturing companies registered in India with projects resulting in a minimum value addition of 60 per cent in integrated fibre to fabric, garment and technical textiles, as per the notified guidelines of the scheme.

However, for proposal of independent fabrics processing house, this required minimum value enhancement will be only 30 per cent, the notification, issued on Monday, added.

Turnover achieved from trading and outsourced job work will not be accounted. “The goods which are manufactured by the company registered under the scheme shall only be eligible for the incentives,” the notification specified. In other words, goods manufactured by other manufacturer (job worker) or unit of same group company shall not be accounted for calculation of incremental turnover. The scheme proposes to incentivise 40 MMF (man made fibre) apparel, 14 MMF fabrics listed and 10 segments of technical textiles products.

Gestation period

There will be a two-year gestation period allowed to units and incentives under the scheme will be available for five years, during 2025-26 to 2029-30, on incremental turnover achieved during 2024-25 to 2028-29. If a company is able to achieve the investment and performance targets a year earlier, then it will become eligible one-year in advance.

To ensure that a large company does not corner a big portion of the available incentive, there will be a provision of cap of 10 per cent over the prescribed minimum incremental turnover growth of 25 per cent for the purpose of calculation of incentives from the second year onward. Turnover achieved beyond that cap will not be taken into account for calculation of incentive. “However, for year 1, the cap of 10 per cent will be applied over a turnover of two times of investment made under the scheme. Turnover achieved beyond two times of the investment+ 10 per cent, shall not be accounted for calculation of incentives in year 1,” the notification clarified.

Also read: PLI for textiles: Govt to impose 30-60% as value-addition norm

Only one company of a group will be allowed to be registered for PLI for textiles and none of their other group companies will be eligible for participation in this scheme as a second participant. However, the group may make more than one application for consideration but they will have to take a decision at the time of selection regarding the proposal they want to take forward in case more than one of their proposals are shortlisted.

Published on September 28, 2021

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