First tranche of disbursements in textile PLI likely to begin this fiscal
- Amid signs of a recovery in exports in August, about a dozen companies are set to start receiving incentives under the Production Linked Incentive (PLI) scheme for the textile sector.
Highlights:
- Amid signs of a recovery in exports in August, around a dozen companies will begin receiving incentives under the Production Linked Incentive (PLI) scheme for the textile sector during the current financial year.
Details of the PLI Scheme:
- The first tranche of disbursements under the PLI scheme for textiles, covering man-made fibres (MMF), apparel, MMF fabrics, and technical textiles, will commence after a significant delay attributed to weak export demand in the West.
- Launched in 2021 with a budget of ₹10,683 crore, this initiative aims to boost textile manufacturing.
Government Perspective:
- Rachna Shah, Secretary of the Ministry of Textiles, emphasized that the PLI scheme will enhance textile manufacturing and investments due to India’s complete value chain in this sector. The PM Mega Integrated Textile Region and Apparel schemes, along with free trade agreements, will also contribute to scaling textile manufacturing.
Employment Initiatives:
- Union Minister of Textiles, Giriraj Singh, outlined a roadmap to create 4.5 to 6 crore jobs in the textile sector by 2030. The objective is to increase the sector's market size from approximately $165 billion to $350 billion.
- Singh highlighted that Indian textile workers receive better wages compared to their counterparts in other countries. He also noted the rapid expansion of the domestic textile sector and the promotion of the ‘Make in India’ initiative.
Challenges in Textile Exports:
- India's textile exports faced a decline for the second consecutive year in 2023-24, raising concerns about job creation in labor-intensive sectors.
- A World Bank report indicated a decline in employment linked to international trade over the past decade, with India's share in global exports of labor-intensive sectors, including textiles, decreasing. In contrast, countries like Bangladesh and Vietnam have increased their market share significantly.
Strategic Recommendations:
- The World Bank economists recommend that India develop a strategic plan to diversify exports and leverage the changing geopolitical landscape.
- Suggestions include reducing trade costs and improving trade facilitation, as progress is hindered by new barriers affecting goods, services, and investments.
Prelims Takeaway:
- Production Linked Incentive (PLI) scheme
- Least Developed Country (LDC) status
- Free trade agreements (FTAs)