India’s textiles industry is vast and diverse, but until recently, its global competitiveness in certain high-value categories has been limited. Man-made fibre (MMF) products and technical textiles, despite their growing global demand, have remained underdeveloped in India compared to natural fibres like cotton. To address this gap, the Government of India launched the Production Linked Incentive (PLI) Scheme for Textiles, with a total budget outlay of ₹10,683 crore.
The scheme aims to strengthen India’s manufacturing capacity in MMF apparels, MMF fabrics, and technical textiles, enabling the sector to scale up, become more competitive internationally, and generate significant employment. It is a five-year scheme running from FY 2024–25 to FY 2028–29, governed by the Ministry of Textiles (MoT).
In this blog, we break down the scheme’s background, eligible products, investment thresholds, incentives, and conditions, along with the selection process.
Background of the Scheme
The PLI Scheme for Textiles was introduced as part of the Atmanirbhar Bharat initiative to enhance domestic manufacturing and boost exports. Its design focuses on high-potential, value-added textile segments that have a strong export market and can generate large-scale employment.
Key points about the scheme:
- Administered by the Ministry of Textiles (MoT)
- Targets MMF apparels, MMF fabrics, and technical textiles
- Encourages large-scale investment for achieving economies of scale
- Duration: Five consecutive years, FY 2024–25 to FY 2028–29
- Incentives linked to incremental turnover from eligible products manufactured entirely in India
Eligible Products and Incentives
The scheme covers only products whose full manufacturing process — from raw material to finished goods — takes place in India.
Eligible categories:
- Listed MMF Apparels — 40 sub-chapters, including items like jerseys, trousers, shirts, jackets, nightwear, and accessories made from synthetic or artificial fibres
- Listed MMF Fabrics — 13 sub-chapters, including polyester, rayon, nylon, and other synthetic fabrics
- Technical Textiles — 10 segments, covering specialised products like medical textiles, geotextiles, defence textiles, sports fabrics, protective clothing, and smart textiles
The eligibility under each category is divided into Part 1 and Part 2:
| Particulars | Part 1 | Part 2 |
| Minimum Investment | ₹300 crore | ₹100 crore |
| Minimum Turnover in FY 2024–25 | ₹600 crore | ₹200 crore |
| Incentive Rate (Year 1) | Starts at 15% → reduces to 11% | Starts at 11% → reduces to 7% |
| Minimum Annual Turnover Growth (from Year 2) | 25% | 25% |
| Max Incentive Cap (Year 2–5) | 10% above prescribed growth | 10% above prescribed growth |
| Max Turnover Cap (Year 1) | 2× investment amount + 10% | 2× investment amount + 10% |
Incentives reduce by 1% each year from Year 2 to Year 5.
Other Conditions
To ensure genuine investment and production, the scheme has specific operational requirements:
- The applicant must form a separate company under the Companies Act, 2013 before starting investment for this scheme.
- Only manufacturing companies registered in India are eligible. All processing and operations must be carried out in the applicant’s own factory premises.
- Integrated operations (from fibre/yarn to finished fabric or garment) must achieve at least 60% value addition; independent fabric processing units must achieve at least 30%.
- Turnover from trading or outsourced job work will not qualify for incentives.
- Sales must be supported by GST invoices, and payments must be received through normal banking channels. Eligible products will be verified using their 8-digit HSN code.
- Investments made after 27 September 2021 (scheme notification date) count towards the threshold, provided they are completed by 31 March 2024.
- Eligible investments include plant, machinery, equipment, and civil works (excluding land and administrative building costs).
Other Conditions
- Only one entity from a group can avail the scheme; if multiple applications from the same group are shortlisted, the group must choose one.
- If conditions are not met in time, incentives will be available for fewer years, but the applicable rate will remain as per the first year for subsequent years.
- If turnover targets are not met in any year, no incentive will be given for that year, but eligibility can be regained in later years within the scheme’s duration.
- Early achievement of investment and performance targets allows incentives to be claimed one year earlier.
- The scheme does not prevent beneficiaries from availing duty remission/exemption or applying under state-level schemes. Clarification from the government is awaited regarding simultaneous claims under ATUFS.
Evaluation Criteria
Selection of participants will follow an Expression of Interest (EOI) process, with an application window announced by the government.
Selection factors include:
- Relevant industry experience
- Financial and technical capacity
- Size of proposed investment
- Potential for job creation
- Location of the unit
A Project Management Agency (PMA) will be appointed to review applications and make recommendations to the government, which will take the final decision on approval.
Broad Product Categories: MMF & Technical Textile Products
MMF Apparels
- Jerseys, pullovers, cardigans, waistcoats, jackets, anoraks, windcheaters
- Trousers, overalls, shorts
- Nightwear, undergarments, hosiery
- Shirts, blazers, dresses, skirts, blouses
- Baby garments and accessories
- Life jackets, ski jackets, swimwear
- Overcoats, raincoats, capes
- Gloves, shawls, scarves, mufflers
- Bathrobes and negligees
MMF Fabrics
- Polyester shirting, suiting, and other woven fabrics (min 85% polyester)
- Dyed, knitted, or crocheted synthetic fabrics
- Pile fabrics, narrow woven fabrics of MMF
- Polyester blends with viscose or rayon
- Spun rayon
- Nylon fabrics, georgette, taffeta
- Nylon furnishing, polyamide fabrics
- Fabrics from strips or similar materials
Technical Textiles
- Medical/hygiene textiles (diapers, sanitary pads, adhesives)
- Geotextiles (membranes, nets, grids)
- Agro textiles (fishing nets, crop covers, shade nets)
- Defence textiles (bulletproof jackets, tents, parachutes)
- Mobility textiles (tyre cords, airbags, seat webbings)
- Sports textiles (sailing cloth, sports equipment fabrics)
- Protective textiles (fire-protection garments, PPE)
- Building/construction textiles
- Carbon fibre, glass fibre
- Smart textiles with embedded devices
How Can We Assist?
M2K Advisors can support businesses through both the application and implementation phases of the PLI Scheme:
Phase I – Evaluation and Application
- Assess eligibility based on products and criteria
- Liaise with authorities for clarifications
- Prepare and submit the application with supporting documents
- Coordinate with management on strategy for application
- Monitor compliance with commitments in the approval letter
Phase II – Post Selection Assistance
- Prepare and submit annual claims for incentives
- Verify financial data and compute eligible amounts
- Liaise with authorities for claim processing
- Collate required documents and ensure timely submissions
Final Thoughts
The PLI Scheme for Textiles is not just an incentive programme — it’s a strategic push to make India a leader in high-value textiles. By targeting MMF and technical textiles, the scheme aligns with global demand trends and addresses India’s current production gaps. For companies willing to invest and scale, this scheme offers a significant opportunity to enhance competitiveness, expand capacity, and contribute to job creation in one of India’s most critical industries.
