Texpreneurs to submit suggestions on Production Linked Incentive 2.0 for textiles

The Indian Texpreneurs Federation (ITF) will seek detailed clarifications and submit its suggestions to the Union government by October 20 on the proposed second round of Production Linked Incentive (PLI) scheme for textile sector.

According to Prabhu Dhamodharan, convenor of ITF, at least 25 companies that manufacture garments or home textiles in the western districts of Tamil Nadu are expected to invest under the scheme, when it is implemented. These will make investments in the ₹15 crore or ₹30 crore brackets. The scheme is fibre neutral and hence, textile and clothing industries in Tamil Nadu, which are predominantly cotton based, can benefit from this.

The ITF conducted two rounds of discussions with its members and has joined hands with KPMG to discuss the scheme with the potential investors of the region and submit its suggestions to the government.

There are conditions such as minimum number of machines to be installed. This cannot be common for home textiles and garment sectors. The government should allow the entrepreneurs to choose the machinery, he said.

The average size of apparel units in Tiruppur and home textile units in Karur is ₹20 crore to ₹30 crore annual turnover. With several buyers looking at China plus one approach for sourcing, there are huge opportunities for Indian exporters. The units need scale, competitiveness, and specialisation to tap the opportunities, Mr. Dhamodharan said.

The proposed scheme will benefit small and medium-scale industries that want to scale up and invest in modern machinery, he added.

Applications approved

The Central government announced a PLI Scheme for textile sector in September last year and approved 64 applications for production of manmade fibre apparel, fabrics, and 10 product lines in technical textiles. The total outgo for the scheme is envisaged to be ₹ 6,400 crore of the total allocation of ₹ 10,683 crore.

Now, the government has released a draft on second round of the scheme for the textile sector and it is for apparel, garments, home textiles and textile accessories, such as embellishments, trimmings, zippers, and elastic tapes. Products under three HS codes (61, 62, 63) can be produced by units under this scheme and the outgo is expected to be ₹ 4,283 crores. The participating company is expected to complete investment during the gestation period (2022-2023 to 2023-2024) and achieve the required turnover from 2024-2025.

For garments and home textiles, the minimum investment can be ₹ 15 crore (minimum 1,000 machines) or ₹ 30 crore (minimum 2000 machines) or ₹45 crore (minimum 3,000 machines) and the annual turnover from the new investment should be ₹30 crore, ₹ 60 crore or ₹90 crore respectively. The qualifying investment and turnover for textile accessories is ₹10 crore and ₹20 crore.