As Production Linked Incentive (PLI) & Mega Investment Textiles Parks (MITRA) of Ministry of Textiles (MoT) are taking final shape, the industry is concerned about the condition of incremental turnover of 25 per cent over immediate preceding year for greenfield (new entities) and brownfield (existing entities in textiles) and same is 40 per cent over base year/immediate preceding year.
The rate of incentives for both kinds of projects will be 15 per cent to 11 per cent and 9 per cent to 5 per cent from year 1 to 5 on incremental turnover, respectively.
With both the schemes, MoT’s focus is primarily on manmade fibre and technical textiles.
In a consultation session with the industry and officials of the Ministry of Textiles (MoT), Harish Ahuja, CMD, Shahi Exports said that 40 per cent growth is not possible in the apparel sector and it is possible only in IT.
The MoT officials were of the view that almost 60 per cent of the total investment will be back in 5 years as an investment, and therefore investors from the industry should not be worried about the investment.
Detail of PLI and MITRA schemes (PPT of MoT)
UP Singh, Textiles Secretary satisfied the queries raised by the industry. Besides answering questions eloquently, he was open to suggestions and willing to make changes if required.
The session was organised by Invest India, the national investment promotion and facilitation agency.
The MoT’s officials made it clear that PLI scheme is not for entire value chain, but for finished products and fabric production only.
The investment will be counted from fibre to anything, but turnover (major criteria for incentives) will be considered on apparel/finished products and fabrics. Only investment on land will be excluded in total investment required parameters and turnover from the domestic market will also be included in the overall turnover parameters. The investment will be counted from the date of notification of the scheme.
In the recent budget, 7 mega textiles parks were announced under MITRA scheme, wherein these parks will be focusing much on scale and will be having everything from spinning and apparel to Inland Container Depot (ICD) under one roof, with each park expected to generate around 1,50,000 lakh jobs.
The MoT believes that once these parks will be fully operational, the lead time will be reduced by 12-15 days and the costing of garments will be reduced by up to 15-20 per cent. Special labour laws will be another advantage of these parks. These will be developed in 2 phases with phase 1 planned to be completed in 3 years.
Notably, State Governments will have major stakes in these parks. Investment in each park will be around Rs. 10,000 crore and per year export is expected to be Rs. 7,000 crore.
