The 10 Positives Of The PLI Scheme For Textiles… And Some Pitfalls

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Taking a step forward towards the ‘’Atmanirbhar Bharat’’ vision of the Prime Minister Mr Narendra Modi, the Cabinet has approved the PLI scheme for the textile industry earmarking Rs 10,683 crore over five years. The scheme is primarily for the man-made fibre based products and technical textiles, where India is lagging behind.

The PLI scheme has lot of positives:

  1. It will encourage creation of state-of-the-art large capacities in MMF garments which India very much needs
  2. It will help in making garments the export growth engine as it happened in China, Vietnam and Bangladesh
  3. It will help in making manufacturing more cost competitive
  4. It will encourage manufacturing of many import substitute products, thus saving precious foreign exchange
  5. It will help in building value chains across the entire spectrum of garment manufacturing and build large scale production
  6. It will bring in a new era of integrated manufacturing as compared to the current structure of the industry in India
  7. It will boost the exports of MMF products and technical textiles thus increasing India’s share in the global trade
  8. It will help in creating some global champions in MMF garments and technical textiles
  9. It will offer an alternative destination to global buyers in supporting their ‘China+1’ policy initiative for sourcing
  10. It will create nearly 7.5 lakhs new jobs
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However, the PLI scheme also has some limitations:

  1. – The scheme requires high level of capital investments which can be made only by a few financially strong companies.
  2. MMF-based garments will attract investments under the scheme, but the sector being labour intensive, the big corporates will be hesitant in the backdrop of the age-old labour laws. Unless there are reforms in labour laws, the scheme might not attract corporates.
  3. Claiming the incentives should not become a cumbersome process, otherwise there is a fear of the scheme becoming a non-starter.
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