Flexible Timelines for PLI in Textiles

The Textile Ministry is considering the option of providing certain flexibilities to investors under the ₹10,683-crore production linked incentive (PLI) scheme for the man-made fibre (MMF) and technical textiles sectors to help them meet the strict timelines for achieving the mandatory prescribed minimum annual turnover.

The idea is to ensure that the industry does not miss out on incentives due to genuine problems they may encounter in their business activities, sources have said.

No change to list

The Ministry, however, is not in favour of expanding the list of products eligible for benefits, as suggested by the industry, as the list had been finalised following a lot of consultations and would require another Cabinet approval if changed.

“The Textile Ministry has had another round of interaction with the industry and made a final draft of the guidelines for the scheme which has to now be approved by the Commerce & Industry Minister before notification. An attempt has been made to address genuine problems,” the source said.

The PLI scheme has a budgetary outlay of ₹10,683 crore.

‘Dies Non Year’

Under the scheme, if participants fail to achieve the prescribed minimum net incremental turnover for any given year, they will not be eligible for claiming incentive for that particular year. The year the participants fail to meet the criteria will be considered as “Dies Non Year” and they will only be eligible for benefits in the remaining years of the five-year block.

“There is a possibility that there may be a couple of months delay for a beneficiary in achieving the prescribed incremental turnover in a particular year because of unforeseen circumstances such as delay in shipments, payments and anything related. There may be a case for giving them some extra time under such circumstances so that they do not lose out on their incentives,” the source said.

The Textile Ministry is considering accepting the proposal to allow flexible timeline to the Empowered Group of Secretaries on implementation of the PLI scheme for textiles, headed by the Cabinet Secretary. The group, which also includes the Textiles Secretary and Niti Aayog CEO, is empowered to make any changes in the modalities of the scheme and address any issues related to genuine hardship that may arise during the course of implementation.

Two-part scheme

Benefits under the PLI scheme are to be provided for five years from 2025-26 to 2029-30 on incremental turnover achieved during 2024-25 to 2028-29. The scheme covers 40 MMF garments, 14 MMF fabric items and 10 technical textiles items.

Per part one of the scheme, beneficiaries need to invest a minimum of ₹300 crore in plant, machinery, equipment etc. They will earn an incentive of 15 per cent of turnover the first year and thereafter, one per cent lower every year for the next four years on achieving minimum turnover of ₹600 crore in the first year and incremental turnover of 25 per cent in the subsequent four years.

In the second part, the minimum investment limit is lower at ₹100 crore, while incentives, too, are lower, starting at 11 per cent in the first year and getting reduced by 1 per cent each year in the four subsequent years. In this category, beneficiaries need to attain a minimum turnover of ₹200 crore in the first year and an incremental turnover of 25 per cent in the following four years.