It appears that the expansion of the Production-Linked Incentive (PLI) scheme for textiles to garments is currently on hold. While the textiles minister Giriraj Singh had previously expressed that the government was considering extending the PLI scheme to garments to enhance manufacturing and exports, recent reports indicate that the government is prioritizing the utilization of the existing scheme for textiles rather than expanding it.
The government had introduced the PLI scheme for textiles in 2021 with a budget of ₹10,683 crore over five years to encourage the production of man-made fiber (MMF) apparel and fabrics. The plan was expected to generate fresh investments of over ₹19,000 crore and create more than 7.5 lakh jobs. So far, 74 applicants have been approved under the scheme with an estimated incentive of ₹7,086 crore.
However, despite some success, textiles have lagged behind other sectors like large-scale electronics manufacturing, which has performed exceptionally well under the broader PLI scheme. With the PLI incentives disbursed till FY 2023-24 standing at ₹9,721 crore across all sectors, the government is now focusing on ensuring better utilization of the current scheme rather than expanding it to other areas like garments.
One reason behind the decision to put the expansion on hold is the desire to avoid continuous tweaking or expanding of schemes across multiple sectors, which could lead to an influx of requests for similar incentives in other industries. The Centre appears to be concentrating on boosting the existing textile scheme’s efficiency before making any further changes.
