PLI for man-made fibres is timely, but it should help MSMEs improve scale
Following representations from industry, the Cabinet has approved certain changes in the ₹10,683 crore performance linked incentive (PLI) scheme for man-made fibres. The PLI has been expanded to include more products. It also offers two sets of investment and turnover incentives to suit different scales of operations. Broadly, the move is to be welcomed, as India has a lot of catching up to do with respect to grabbing market share in the global man-made fibre (MMF) trade, which accounts for over two-thirds of global textiles trade. India remains a cotton player, its value chain remaining natural-fibre oriented. India needs to lift its now stagnant share of just over 4 per cent in global textiles exports if it has to sustain the livelihoods of over 45 million people who directly depend on this sector. Textiles Ministry researchers have pointed out that in the top 40 MMF lines, which alone accounted for 16 per cent (about $130 billion) of the global textiles exports of over $800 billion in 2019, India’s share was just $1 billion or less than 1 per cent; this is against a share of 4.3 per cent in global textiles exports overall. Similarly, in the fast growing technical or industrial textiles segment, India is a non-entity. In the top 10 lines in this area, India’s exports were $0.7 billion in global exports of over $80 billion. The PLI is focussed on these remarkably weak links in the textiles value chain. Besides these 50 MMF and technical textiles products, the PLI has been extended to include 14 MMF fabric lines.
Transformation in textiles cannot come about through PLIs alone. Mega textile parks, envisaged in Budget 2021-22, will reduce overheads, and should be implemented on priority. India should forge FTAs with countries like Britain, Canada and Australia. Textiles, generally regarded as a sunset sector, has been given the attention it deserves. The critical part is to ensure that the PLI clauses enhance the industry’s competitiveness.