PLI plan for India’s textile sector

PLI plan for India’s textile sector

Part of: Prelims and GS – III – Economy 

Context The Union Cabinet recently approved a Rs. 10,683 crore Production Linked Incentive (PLI) scheme for the textile sector

• Objective: To help India regain its historical dominant status in global textiles trade.

Key features of the scheme

• The incentives shall encourage investment in new capacities in man-made fibre (MMF) apparel, MMF fabrics, and 10 segments or products of technical textiles. 
• The scheme shall help attract investment of more than Rs. 19,000 crore, creating an additional 7.5 lakh direct jobs.
• There will be two levels of investment with different sets of incentives. 
  • In the first category, any person or firm can invest a minimum Rs. 300 crore in plant, machinery, and civil works to produce the identified products to ensure eligibility for the PLI.
  • In the second category a minimum investment of Rs. 100 crore would make an individual or firm eligible to apply for the incentives.
• Priority would be given for investment in aspirational districts, tier-three, tier-four towns and rural areas. 
• The scheme is expected to benefit States such as Gujarat, U.P., Maharashtra, Tamil Nadu, Punjab, Andhra, Telangana and Odisha.
• Applicants would have two years as investment period and 2024-2025 would be the ‘performance’ year. The incentive flow would start in 2025-2026 and extend for five years.

Significance of the Textiles Sector

• Textiles & garments industry is a labour intensive sector that employs 45 million people in India. 
• It is second only to the agriculture sector in terms of employment.
• It contributes 2.3% to Indian GDP, 7% of Industrial Output, 12% to the export earnings of India and employs more than 21% of total employment.
• India is the 6th largest producer of Technical Textiles with 6% Global Share, largest producer of cotton & jute in the world.
• Technical textiles are functional fabrics that have applications in industries such as automobiles, civil engineering and construction, 
• India is also the second largest producer of silk in the world and 95% of the world’s hand woven fabric comes from India.
• Two-thirds of India’s textile exports now are cotton based whereas 66-70% of world trade in textiles and apparel is MMF-based and technical textiles. 

What are Major Initiatives by India in the textile sector?

• Amended Technology Upgradation Fund Scheme (ATUFS): For technology upgradation of the textiles industry (2015)
• Scheme for Integrated Textile Parks (SITP): To assist small and medium entrepreneurs in the textile industry to clusterize investments in textile parks by providing financial support for world class infrastructure in the parks.
• SAMARTH (Scheme For Capacity Building In Textile Sector): To address the shortage of skilled workers. 
• North East Region Textile Promotion Scheme (NERTPS): This is a scheme for promoting textiles industry in the NER by providing infrastructure, capacity building and marketing support to all segments of the textile industry.
• Power-Tex India: It comprises new research and development in power loom textiles, new markets, branding, subsidies and welfare schemes for the workers.
• Silk Samagra Scheme: It focuses on improving the quality and productivity of domestic silk thereby reducing the country’s dependence on imported silk.
• Jute ICARE: This pilot project launched in 2015 is aimed at addressing the difficulties faced by the jute cultivators by providing them certified seeds at subsidized rates, and by popularizing several newly developed retting technologies under water limiting conditions.
• National Technical Textile Mission: It aims to position the country as a global leader in technical textiles and increase the use of technical textiles in the domestic market. It aims to take the domestic market size to USD 40 billion to USD 50 billion by 2024.

News source: TH