The PLI program for textiles attracts 67 companies; RIL, Arvind, Bombay Dyeing, Welspun among the candidates

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Textiles Secretary UP Singh said the investments committed by the candidates had exceeded government expectations by more than Rs 19,000 crore.

As many as 67 companies have applied for support under the Production Linked Incentive Scheme (PLI) of Rs 10,683 crore for the textile and apparel sector, pledging investments of around Rs 23,000 crore , Textiles Secretary UP Singh said on Saturday.

Singh did not reveal the names of potential investors, but sources told FE that candidates include Reliance Industries, Arvind Group, Welspun, IndoRama Synthetics, Bombay Dyeing, Vardhman Group, Trident and Shahi Exports. “The who’s who of the textile and apparel industry has shown interest in the program. The list of beneficiaries will be released soon,” one of the sources said. The textile ministry’s initial target was to attract 60 companies, he added.

Singh said the investments committed by the candidates exceeded government expectations by more than Rs 19,000 crore. The PLI textile program covers 40 synthetic fiber garments (MMF), 14 MMF fabric products and 10 technical textile articles. “We have taken a number of steps to support the growth of the technical textiles sector. There has been a very good response for the PLI program,” Singh said at a CII event.

The government had extended, for a second time, the deadline for requesting incentives under this scheme in order to give companies more time to weigh their investment projects. Interested companies were allowed to submit their applications until 28 February.

Under this program, the incentives will be extended for five years. It will remain operational until 2029-30.

The scheme is open to two categories of investors. Those who will invest at least Rs 300 crore will be eligible for a 15% incentive in the first year if they achieve a turnover of Rs 600 crore or more.

Similarly, those who invest at least Rs 100 crore will get 11% in the first year if their turnover reaches Rs 200 crore or more. After the first year, both categories of investors must show an additional turnover of 25% per year. But earnings will fall 100 basis points year over year either way.

This PLI regime marked a paradigm shift in government decision-making on two counts. First, it allocates a lot of money to big business, abandoning its time-consuming and costly bias in favor of small business. Second, it seeks to correct India’s historical policy preference for a cotton-dominated value chain, which is contrary to the global trend. The idea is to win back India’s export markets after losing ground to Bangladesh and Vietnam in recent years.

Even before the pandemic hit, India accounted for 4.3% (or $35.5 billion) of global textile and apparel exports in 2019, but its share in the synthetic fibers segment was well below 2. .8% ($9.3 billion). In fact, synthetic fiber products accounted for only 26% of India’s textile and garment exports, compared to nearly 50% in China and 49% in Vietnam.

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