India may extend textile incentive scheme by up to 2 years to attract more companies

The government is considering extending the ₹10,683-crore Production Linked Incentive (PLI) scheme for the textiles sector by one to two years to attract more applicants and ensure full utilisation of the allocated funds, according to sources.Sources said the scheme, currently scheduled to run until FY2028-29, may be extended beyond that period as several participating companies remain in the investment and project implementation phase.The textile PLI scheme was launched in 2021 to boost domestic manufacturing of man-made fibre (MMF) apparel, MMF fabrics and technical textiles, segments where India has traditionally lagged global competitors such as China, Vietnam and Bangladesh.According to sources, around ₹400 crore has been disbursed under the scheme so far, reflecting the fact that many approved projects are still in their gestation period and have not yet reached the stage where incentive payouts become due.Officials believe the extension would provide additional time for companies to complete investments and commence production, thereby helping attract fresh participants to the programme.Sources said the government has received a positive response from the industry and remains open to the possibility of enhancing the scheme through additional incentives if required.Under the PLI framework, companies receive financial incentives linked to incremental production and investment targets, with the objective of expanding manufacturing capacity, boosting exports and creating jobs.The textile scheme is part of the broader PLI programme under which the Union government committed over ₹1.97 lakh crore across 14 sectors over a five-year period beginning FY2021-22.The PLI programme was introduced to strengthen India’s manufacturing ecosystem, reduce import dependence and position the country as a global production hub.Sectors covered under the scheme include advanced chemistry cell batteries, automobiles and auto components, drones, food processing, high-efficiency solar PV modules, medical devices, pharmaceuticals, speciality steel, telecommunications, textiles and white goods.Sources indicated that the full allocation under the textile PLI scheme is expected to be utilised by the end of the programme, with manufacturing facilities under approved projects spread across 150 districts in 24 states.Also Read: German court holds Google liable for false AI Overview answers; here’s where Indian law stands

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