The Government has 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 apparels.
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.
The Ministry of Textiles (MoT) said that only those companies would be selected for the incentive under the programme, which contribute 60 per cent value addition in integrated fibre/yarn to fabric, garment and technical textiles and 30 per cent in case of independent fabrics processing house.
Technical textiles include safety airbags, shade nets, bullet proof jackets, surgical sutures, PPE for medical use and carbon fibre.
The Government has also included ‘Smart Textiles’, a new generation niche product that is a combination of varieties of wearable materials embedded with electronics, embedded with active devices for medical, defence and special use in the list of products eligible for the benefits.
MoT said that the description does not fit into any particular HSN Code at present. A suitable HSN Code at 8-digit needs to be created afresh for this product.
The notification says that the incentives under the scheme will be available for five years, i.e., during FY26 to FY30 on incremental turnover achieved from 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.
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.
For getting incentive, both the conditions of minimum investment and minimum turnover should be met.
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 per cent 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 per cent over the immediate preceding year’s turnover up to year.
However, the incentive will be reduced by 1 per cent every year from the second year onwards till the final year and would become 11 per cent 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 per cent and end at 7 per cent in the last year.
Source : https://in.apparelresources.com/