The Union Cabinet approved a Rs 10,683 crore production-linked incentive scheme for the textiles sector, on Wednesday.
This scheme will provide incentives to companies that produce more than 50 man-made fibre textiles and fabrics, as well as some technical textile items. The five-year plan for this industry is part of a PLI plan for vital sectors worth approximately Rs 2 lakh crore, which includes telecom.
Piyush Goyal, Minister of Textiles, Commerce, and Industry, intended to introduce it as part of a bigger package of measures for the sector, which included fee refunds and other incentives recently approved by the cabinet.
The majority of textiles produced in India are created from natural fibres such as cotton, however, man-made fibres produced globally account for the majority. The goal is to boost India's participation in this market, which is now less than 3 per cent, Textiles Secretary, Upendra Prasad Singh said.
Entities investing more than Rs 300 crore in the plant, machinery, equipment, and civil works for the production of selected items will be eligible for a 15 per cent bonus based on turnover, which in the third year will require Rs 600 crore. It will decline by one percentage point each year until it is phased out after the fifth year, but it will be tied to incremental turnover. For those who wish to invest, there is another scheme.
According to Goyal, the initiative would prioritise institutions that set up shops in underserved areas and create more jobs. The Ministry of Textiles plans to unveil the scheme in the coming days, and the guidelines before the end of the month. Companies should be able to apply in November and December, according to Singh.
The government expects new investments of Rs 19,000 crore over the next five years, resulting in a total turnover of Rs 3 lakh crore and extra employment prospects for nearly 7.5 lakh people.