Government notifies textile PLI: 30-60% value add, introduces ‘Smart Textiles’

The government on Monday notified the Rs 10,683 crore Production Linked Incentive (PLI) scheme for textiles that covers 10 technical textile products, 14 manmade fibre (MMF) products and 40 MMF apparel. The textiles ministry said that only those companies would be selected for the incentive under the programme which contribute 60% value addition in integrated fibre/yarn to fabric, garment & technical textiles and 30% in case of independent fabrics processing house.

The scheme outlines two categories with different incentives based on minimum investment of Rs 300 crore and Rs 100 crore and covers products such as jackets, jerseys, trousers, overcoats, polyester fabric and nylon furnishing fabrics.

Technical textiles include safety airbags, shade nets, bullet proof jackets, surgical sutures, Personal Protective Equipment for medical use and carbon fibre.

The government has also included Smart Textiles embedded with active devices for medical, defence and special use in the list of products eligible for the benefits.

Smart Textiles is a new generation niche product that is a combination of varieties of wearable materials embedded with electronics.

“The description does not fit into any particular HSN Code at present. A suitable HSN Code at 8-digit need to be created afresh for this product,” the textiles ministry said.

As per the notification, incentives under the scheme will be available for five years period i.e. during FY26 to FY30 on incremental turnover achieved during FY25 to FY29 with a budgetary outlay of Rs 10,683 crore.

However, if a company is able to achieve the investment and performance targets one year early then, they will become eligible one-year in advance starting from FY25 to FY29.

As per the notification, any person, which includes firm/company willing to invest a minimum Rs 300 crore in Plant, Machinery, Equipment and Civil Works (excluding land and administrative building cost) to produce products of the notified lines, will be eligible to participate but they would have to form a separate company under Companies Act, 2013, before commencement of investment under this scheme.

“Thus, for getting incentive, both the conditions of minimum investment and minimum turnover should be met,” the ministry said.

The companies which invest Rs 300 crore, are expected to achieve a required turnover of Rs 600 crore after a gestation period of two years and a 15% incentive will be provided on attaining the same. Incentive in the subsequent years will be provided on achieving a minimum additional incremental turnover of 25% over the immediate preceding year’s turnover up to year. However, the incentive will be reduced by 1% every year from the second year onward till the final year and would become 11% in the year 5.

Only such sales will be counted, which are transacted through normal banking channel, according to the notification.

Similarly, those who apply for the Rs 100 crore category, would have to achieve a turnover of Rs 200 crore and the benefits will start from 11% and end at 7% in the last year.