Category: General
Country: India
Region: Asia
The government plans to implement corrective measures to support the textiles industry in achieving a positive growth trajectory.
Dhirendra Kumar
First Published
18 Jun 2024
The Centre may bring more product lines, such as t-shirts and innerwear, under the coverage of nearly ₹11,000-crore production linked incentive (PLI) scheme for the textile sector, according to two people close to the development.
The government will also extend the time provided to an applicant to set up the facility from two years to over three years, the people added.
The Centre plans to tweak the scheme, approved in September 2021, to increase its effectiveness as it has failed to boost India's textile exports, with them declining 11.69% from $16.24 billion in 2018 to $14.34 billion in 2023.
Mint reported in April that the central government is planning a periodic review of the performance of its marquee manufacturing incentive scheme across sectors and make necessary adjustments.
The government is considering restructuring the PLI scheme in sectors with slow progress, and even scrap it in sectors where investor interest is dim and not much progress has been made, the report said.
Industry demand
According to industry stakeholders the scheme would do better by reducing the minimum entry level so that smaller players could also benefit from it.
“If the government is keen to have the garment sector also take advantage of the PLI Scheme, they will have to treat the minimum entry levels differently from the rest of the sector, as the capital required to set up a mega garment unit is substantially lower than that of a textile unit,” said Rahul Mehta, chief mentor at the Clothing Manufacturers Association Of India.
"Textile industry is composed of textile and apparel industries. The current PLI scheme structure with large capital layout is more suited to setting up large textile mills but not apparel factories,” said Pawan Gupta, chief executive and co-founder of Fashinza, a business-to-business global fashion supply chain startup.
"We need a PLI scheme with a lower initial capital requirement for the apparel industry, which is a significant employer compared to mills that are increasingly automated. A substantial base of apparel factories would also act as demand centres for large mills, which might otherwise struggle to sell their products," Gupta added.
Based on industry suggestions, the government plans to implement “corrective measures to support the textiles industry in achieving a positive growth trajectory”, said one of the persons cited above.
Queries emailed to the spokesperson of the textiles ministry remained unanswered till press time.
PLI goal
The Centre launched the PLI scheme for textiles sector with an approved outlay of ₹10,683 crore to promote the production of man-made fibers (MMF) apparel, MMF fabrics and products of technical textiles in the country to enable the industry to achieve size and scale and to become competitive.
Man-made fibers (MMF) consist of viscose, polyester and acrylic, which are chemically derived. On the contrary, technical textiles is a modern textile category utilized in the production of items like personal protective equipment (PPE), airbags and bullet-proof vests. They find applications in sectors such as aviation, defence and infrastructure.
The governement has approved 64 applicants under the scheme, with a proposed investment of ₹19,798 crore, projected turnover ₹1.94 crore and employment generation of 245,362.
The first set of applicants will start recieving incentives from 2025-26.
“Between 2018 and 2023, India's trade dynamics in the garments, made-ups and textiles sectors have shown a mixed pattern of growth and decline. Overall, India’s total exports in these sectors decreased by 7.87% from $37.16 billion in 2018 to $34.24 billion in 2023,” said Ajay Srivastava, the founder of Global Trade Research Initiative (GTRI), a research group focused on climate change, technology and trade.
While exports of garments and textiles fell by 7.59% and 11.69%, respectively, exports of the made-ups segment rose by 3.10%, Srivastava added.
Made-ups are textiles manufactured into a variety of products such as canvas bags, carpets, tapestries, pillow covers, kitchen linens, and other craft items.
At the same time the total imports in these sectors grew by 25.46% over the five years, $7.32 billion in 2018 to $9.18 billion in 2023, he said, citing the commerce ministry data.
India is the world’s sixth-largest exporter of textiles and apparel, with the domestic apparel and textile industry contributing about 2.3% to the country’s gross domestic product (GDP), 13% to industrial production and 12% to exports.
Courtesy: Livemint.com
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