India plans to expand production-linked incentives for small textile firms: minister

By Manoj Kumar

NEW DELHI (Reuters) - India plans to expand production linked incentives (PLI) to small textile firms soon, part of efforts to increase garment exports to $50 billion by 2030, the federal textile minister said on Tuesday.

The government introduced incentives for the textile sector in 2021, and has so far approved 64 proposals worth 198 billion rupees ($2.37 billion) to promote production of man-made fibre (MMF) fabric, garments and technical textiles.

"We are considering to review the PLI scheme," Giriraj Singh, federal textile minister, said at the India International Garment Fair, noting the scheme had emerged as a big success to attract investments and expand production.

He said state incentives for improving product quality, entering new markets and signing free trade agreements with several countries, including the UAE and Australia, could help the labour-intensive industry - a priority for the Prime Minister Narendra Modi's administration.

"We are working on a roadmap to move ahead of China, not only Bangladesh in textiles," he said, adding his ministry would soon hold meetings with big companies to understand their concerns.

India's $170 billion textile and apparel industry, which employs over 45 million, has been facing a decline in exports as European and the U.S. consumers cut back spending in 2023 amid tight monetary conditions.

Textile and apparel exports declined to $35.94 billion in the 2023/24 fiscal year ending in March from a record $44.51 billion in 2021/22, commerce ministry data showed.

Garment exporters are lobbying government ministers, ahead of the annual budget next month, seeking a lower investment threshold limit of 150 million to 300 million rupees under the PLI scheme from 10 to 30 billion rupees, besides higher subsidies on bank loans.

Currently, the government offers 4%-6% cash incentives over a period of five years to the selected companies for achieving production targets, industrialists said.

"The government needs to lower the threshold investment limit and expand PLI benefits to all garments across all fibres," said Mithileshwar Thakur, secretary general, Apparel Export Promotion Council, an apex body of small exporters.

($1 = 83.4100 Indian rupees)

(Reporting by Manoj Kumar; Editing by Chizu Nomiyama)