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How will the Production Linked Incentive Scheme (PLIS) for MMF fabrics, garments and technical textiles, boost the Indian apparel industry?

Led by MMF, Indian apparel exports likely to double in next 3 years

The Cabinet has approved the Production Linked Incentive (PLI) scheme for textiles for 42 man-made fibre (MMF) apparel, 14 MMF fabrics and 10 segments/ products of technical textiles with a budgetary outlay of Production Linked Incentive (PLI) to the tune of ₹10,683 crore. Several textile industry experts shared their views on the topic with Fibre2Fashion.

Dilip Chenoy
Secretary General, FICCI

It’s another major announcement for the textiles sector which would attract more investments and help India to capture significant share in large globally traded items of technical textiles and man-made textiles. Man-made and technical textiles are the growing sectors of the industry globally with immense domestic potential too. India can be a global player in these sectors with the support of PLI and would also help in creating large scale employment.

T Rajkumar
Chairman, CITI

The scheme will provide a major thrust to the MMF fabrics, garments and technical textiles which are being seen as the growth engine of the next decade and will help the Textiles and Clothing (T&C) industry to achieve its short-term as well as long-term goals set by the Government of India.

World over MMF sector and technical textiles are considered as the driving force for the growth of any country’s textile industry and the same has also been endorsed and recognised by our government. Hence, government has addressed many structural issues in the MMF sector by removing anti-dumping duty on Purified Terephthalic Acid (PTA) and Viscose Staple Fibre (VSF) and rejected the proposed anti-dumping duties on PSF, MEG, etc which has made the MMF fibre and yarn cheaply available to the domestic players at internationally competitive prices. The government has also allocated ₹1,480 crores under Technology Mission on technical textiles for encouraging R&D activities in the sector. Thus, the inclusion of both the sectors in PLIS underlines the importance of these segments for enhancing India’s trade share in the global textile trade.

Considering the growing demand for textile products in the domestic sector as well as across the globe, the PLI scheme is expected to attract a fresh investment of over ₹19000 crores, additional production turnover of ₹3 lakh crore in five years and will create additional employment for 7.5 lakh people and would significantly expand the size of the textile sector.

There are two types of investment possible with different sets of incentive structures--first, where a company willing to invest ₹300 crores in plant, machinery, equipment and civil works (excluding land and administrative building cost) to produce products of Notified lines (MMF fabrics, garment) and products of technical textiles, shall be eligible to apply for participation in the first part of the scheme. Similarly, in the second part, a company willing to invest ₹100 crores shall be eligible to apply for participation in this part of the scheme. In addition, priority will be given for investment in aspirational districts, tier III, tier IV towns, and rural areas and due to this priority industry will be incentivised to move to the backward areas. The scheme will positively impact especially states like Gujarat, UP, Maharashtra, Tamilnadu, Punjab, AP, Telangana, Odisha, etc.

S.K Sundararaman
Chairman, Indian Technical Textile Association (ITTA)

PLI is the landmark scheme for the MMF and technical textiles that would give new lease of life for these segments. The scheme would accelerate creation of world-class champions in a short span of time in MMF and technical textile products global trade.

PLI for textiles along with RoSCTL, RoDTEP and other measures of government in textile sector e.g providing raw material at competitive prices, skill development etc will herald a new age in textiles manufacturing. Combining this with various state level incentivisation schemes provides the technical textile Industry of India with unprecedented financial support towards rapid growth.

A Sakthivel
Chairman, Apparel Export Promotion Council (AEPC)

The investment-oriented scheme of ₹10,683 crore for MMF and technical textiles will be a game changer for the sector.

The scheme will result in fresh investment of gigantic proportions, expand manufacturing capacities and enhance exports multifold. It will make India a key player in the global textile value chain with focus on high value MMF products. Besides, it will promote industrial development in backward regions of the country.

India has an abundant supply of MMF fibre and yarn, but we do not have enough production of quality MMF fabric. The PLI scheme will strengthen the Indian manufacturing capacity of MMF fabric and will thus increase the share of MMF based garments year after year. It is currently 20 per cent of the total apparels produced in India. With increase in MMF segment, the Indian apparel exports will double in next three years.

The PLI scheme is expected to enable the setting up of a widespread supplier base for the global champions established under the scheme. It will help bring scale and size and create and nurture global champions, as per the government.

Raja M Shanmugham
President, TEA

The PLI scheme for textiles will promote production of high value MMF fabric, garments, and technical textiles in the country. Need of the hour is for product diversification to fulfill the global requirements and help enhance our market share.

Big corporates could make investments in the scheme, enhance exports and employment.

Pavethra Ponniah
Senior Vice President and Co-Group Head, ICRA Limited

The PLI scheme approved for MMF apparel, MMF fabrics and technical textiles will be provided over the next five years. This will help bridge gaps in India’s textile ecosystem, aligning Indian production to the global demand for MMF and technical textiles. Globally, MMF accounts for bulk of the apparel demand, while the Indian supply-chain is skewed towards cotton apparel, with cotton apparel accounting for 55 per cent of India’s cotton apparel exports.

The scheme will boost domestic manufacturing and self-reliance in technical fabric, apart from driving exports. The scheme is expected to attract investments of ₹19,000 crore during its five-year term. With the PLI prioritising women empowerment and semi-urban and rural manufacturing, ICRA expects large textile manufacturers to announce new capacities under the scheme shortly. The two-tier incentive structure, allowing investments of ₹100 crore and above, will encourage even the mid-sized players in the sector to set up capacities.

Sanjay Garg
President, NITMA

Special attention will be given to generate more employment especially to the women. This scheme will empower them further and increase their participation in the formal economy. This scheme will also positively impact states like Gujarat, Uttar Pradesh, Maharashtra, Tamil Nadu, Punjab, Telangana, and Odisha, among others.

The PLI scheme will attract investment both domestic and through foreign direct investment and it is a timely move against the backdrop of a slowly recovering economy. This scheme will result in fresh investment of above ₹19,000 crore and additional production turnover of over ₹3 lakh crore in five years as envisaged by the government.

Prashant Agrawal
Managing Director, BRFL Textiles Pvt Ltd

We welcome this visionary scheme by the government and believe that this is a giant stride in the right direction, that can elevate the textile industry to greater heights. The scheme will facilitate large scale investments, scale up the existing capabilities, boost employment, and enhance exports. This will help in strengthening the global leadership of Indian textiles at a time when the Indian economy is getting back to normalcy. Historically, Indian policies have been biased towards cotton dominated value chain. However, we are glad that the PLI scheme has been well thought through with a special emphasis on MMF, which makes up around 65-70 per cent of global demand. High value MMF and technical textiles could be a key driver of apparel exports in the coming years, and we are glad that the scheme encourages companies to invest in fresh capacities across these segments. Additionally, it provides a level playing field to the industry vis-à-vis prominent global players, which in turn provides the country an opportunity to emerge as a global hub of textiles manufacturing.

Published on: 09/09/2021

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.

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