Make in India & Textile Manufacturing Growth
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The Make in India Initiative
Overview of India's Textile Industry
The textile and apparel industry contributes 2.3% to our GDP, 13% to industrial
production, and 12% to exports. India exported textile items worth US$ 34.4 billion in 2023-
24, with apparel constituting 42% of the export basket, followed by raw materials/semi-
finished materials at 34% and finished non-apparel goods at 30%. It is also the second
largest employment generators, after agriculture, with over 45 million people employed
directly, including many women and the rural population. As further evidence of
the inclusive nature of this industry, nearly 80% of its capacity is spread across Micro, Small
and Medium Enterprises (MSME) clusters in the country.
The Make in India initiative has catalysed textile manufacturing and exports through key
policy interventions, enhanced infrastructure, and incentives. In the Union Budget 2024-25,
to promote domestic textile production, two more types of shuttles-less looms are added
to fully exempted textile machinery by the government. The government has introduced
multiple schemes to enhance textile production, boost investments, and promote exports,
including:
- Production Linked Incentive (PLI) Scheme for Textiles
- Objective: To increase manufacturing in man-made fibre (MMF) and technical textiles.
- Incentives: Financial incentives for large-scale textile manufacturers.
Key Features and Recent Amendments
The PLI Textile scheme intend to promote production of MMF apparel & Fabrics and technical textile products in the country to enable products to become globally competitive and creator of employment Opportunity. The Pli Textile scheme is based on Minimum threshold investment and achievement of Target Turnover of Notified products only and Incremental turnover of notified products. For the purpose of the scheme minimum 60% Value addition in India for integrated or Fiber/Yarn to fabric or fabric to Garment and technical textiles however for independent fabrics processing industries (dyeing and Printing) the require minimum value addition is 30%
PLI Textile major Amendment announced there is expanded scope of17 NEW HSN codes for MMF Apparel and fabrics In amendment Minimum Incremental Turnover criteria reduce from 25% to 10% incremental turnover over immediately preceding year from performance year 2 onwards in the subsequent years.
Scheme Part 1
Any person including company/firm/LLP/Trust willing to create a separate or existing unit want to set up separate project unit Minimum threshold investment criteria reduced for scheme part 1 from 300 CR to 150CR to manufacture notified products only.
Such company will be eligible to achieve turnover only when they achieve a minimum of 600Cr Turnover by manufacturing and selling the notified products by the first performance year.
Incentive range: 15% On achievement of target turnover and 14% to 11% on incremental turnover respective years
Scheme Part 2
Any person including company/firm/LLP/Trust willing to create a separate or existing unit want to set up separate project unit Minimum threshold investment criteria reduced for scheme part 2 from 150CR to 50CR to manufacture notified products only.
Such company will be eligible to achieve turnover only when they achieve a minimum of 200Cr Turnover by manufacturing and selling the notified products by the first performance year.
Incentive Range: 11% on achievement of target turnover and 10% to 7% on incremental turnover respectivelyss
The participant should commit for setting up of manufacturing facility to manufacture of notified product along with appropriate quality and testing facilities having conformity to prescribe BIS standards and other international standards.
Incentives under PLI
Investment made in green field project after registration will be eligible. Output of manufacturing unit should be as per specified HSN codes only. Transaction made through normal banking channel will only be considered for investment & incentives calculation.
Under component 1:
- Minimum investment of Rs. 300 crore in Plant and machinery plus workshed.
- After gestation period, turnover should be double of investment i.e. more than Rs. 600 crore
- Incentives @15% of investment on notified MMF & TT product HSN Line
- Incentives will be reduced 1% from 2nd year to last (5th Year). Thus in 5th year incentive will be @11%.
- Incentive from 2nd year will be available subject to achieving incremental turnover on base year by 25%.
Under component 2:
- Minimum investment of Rs. 100 crore in Plant and machinery plus workshed.
- After gestation period, turnover should be double of investment i.e. more than Rs. 200 crore
- Incentives @11% of investment on notified MMF & TT product HSN Line
- Incentives will be reduced 1% from 2nd year to last (5th Year). Thus in 5th year incentive will be @7%.
- Incentive from 2nd year will be available subject to achieving incremental turnover on base year by 25%
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