Production Linked Incentive Scheme for Textile (PLI)

The Production Linked Incentive Scheme for Textile Industry is designed to boost textile manufacturing in India, especially in the MMF and technical textiles segments. As an MSME owner, you can benefit from this scheme by expanding your production capacity, adopting modern technologies, and increasing your turnover. The scheme aims to make Indian textiles globally competitive, create new jobs, and encourage investment in high-value products. With a clear structure and transparent guidelines, the PLI Scheme for MSME is a great opportunity for you to take your textile business to the next level.

What is the Production Linked Incentive Scheme for Textiles?

The Production Linked Incentive Scheme for Textiles was launched by the Government of India on 24th September 2021. It is specifically targeted at boosting the production of MMF apparel, MMF fabrics, and technical textiles. The scheme rewards you with direct incentives based on your incremental sales and investments in new manufacturing units. The scheme is operational from the date of notification until 31st March 2030, with incentives available for five years from the year you achieve the required investment and turnover

Objectives of the Production Linked Incentive Scheme for Textiles

• Encourage investment in the textile sector, especially in MMF and technical textiles.
• Help MSMEs like you scale up production and adopt modern technologies.
• Make Indian textile products more competitive in the global market.
• Generate new employment opportunities in the textile sector.
• Promote the manufacturing of high-value textile products within India.

Key Features of the Production Linked Incentive Scheme for Textiles

• The scheme supports new investments in plant, machinery, and civil works (excluding land and administrative building costs).
• You can participate by forming a new company under the Companies Act, 2013.
• The maturity period is up to 5 years of incentive payouts, starting from the year you meet the investment and turnover thresholds.
• There is no interest rate involved, as the scheme offers direct incentives and not loans.
• You must achieve the minimum prescribed investment and turnover to qualify.
• Incentives are calculated as a percentage of your incremental sales over the previous year.
• The scheme is divided into two parts based on the scale of investment and turnover.
• You can avail of other government incentives alongside this scheme.
• Only notified products under Man Made Fibre (MMF) apparel,  Man Made Fibre (MMF) fabrics, and technical textiles are eligible.

Financial Assistance Offered Under the PLI Scheme for Textile

You get direct financial incentives based on your incremental sales, provided you meet the minimum investment and turnover criteria. 

• Minimum investment: ₹100 crore
• Minimum turnover (Year 1): ₹200 crore
• Incentive rates: Start at 11% in Year 1 and reduce each year

Incentive Structure Table

• Incentives are paid annually, based on your incremental turnover (minimum 25% growth over the previous year).
• There is a cap on maximum eligible turnover for incentive calculation: 25% incremental turnover in later years, and 10% over two times the investment in Year 1.

Eligibility Criteria for the Production Linked Incentive Scheme for Textiles

Eligibility

You are eligible if:

• You are an MSME, company, firm, LLP, or trust incorporated in India.
• You are willing to set up a new company under the Companies Act, 2013 for this scheme.
• You commit to the minimum investment and turnover thresholds as per Part 2 - 100 crore and 200 crore).
• You manufacture only the notified MMF apparel, MMF fabrics, or technical textiles products.
• You maintain separate accounts for notified products (including balance sheet, inventory inputs and sales data of production) and non-notified products.
• You meet the minimum value addition requirements (60% for integrated units, 30% for independent fabric processing).
• You have valid PAN, GST, and Director Identification Number registrations

Non-eligibility

You are not eligible if:

• You are not willing to form a separate company under Company Act 2013 as required by the scheme.
• You fail to meet the minimum investment or turnover requirements.
• You are achieving turnover requirement from trading or outsourcing work to other manufacturers or to a unit of same group company
• Your group company has already availed of the scheme for another project.
• You or your group companies are declared bankrupt, defaulters, or blacklisted by any government agency.
• You manufactured those products from the participatory company under the scheme that are not notified under scheme guidelines.
• You do not comply with quality standards or fail to maintain required records.

Documents Required for the PLI Scheme for Textile

• Incorporation certificate of the new company
• PAN, GST, and Director Identification Number
• Project report with investment and turnover projections
• List of notified products you plan to manufacture
• Statutory Auditor’s certificate for investment and turnover
• Undertaking and declarations as per the scheme guidelines
• Details of plant, machinery, and civil works investments
• Proof of payment of the application fee
• Other supporting documents as specified by the Ministry of Textiles

How to Apply for the Production Linked Incentive Scheme for Textiles

Step 1: Register on the official PLI portal for textiles.

Step 2: Fill out the online application form with all required details and upload supporting documents.

Step 3: Pay the non-refundable application processing fee of ₹50,000 electronically.

Step 4: Submit the application and receive an acknowledgment with a unique Application ID.

Step 5: Respond to any queries from the Ministry within the specified timelines.

Step 6: Await the selection committee’s decision. If selected, you will receive a Letter of Approval.

Step 7: After approval, set up the new company and make the required investments.

Step 8: Start production and maintain proper records for notified products.

Step 9: File annual claims for incentives through the portal with audited financial statements.

Benefits of the Production Linked Incentive Scheme for Textiles

• Boosts Competitiveness – Rewards scaling up and modernising, making Indian textiles more globally competitive.

• Drives Growth & Jobs – Expands MMF production, fuels demand for technical textiles, and creates large-scale employment.

• Enhances Exports – Strategic support and tariff benefits strengthen India’s MMF garment exports with a focus on sustainability.

• Removes Industry Barriers – Incentives for automation, better logistics, and lower raw material costs improve efficiency and margins.

• Promotes Inclusive Development – Supports rural economies, empowers women, boosts the cotton industry, and ensures transparent governance.

Real-World Examples of the Production Linked Incentive Scheme for Textiles

• Large MSME investing in Man Made Fibre (MMF) apparel manufacturing
  MSME expanding into technical textiles such as
• Meditech - Industrial brushes, composites, ropes, cordages, conveyor belts
• Agrotech - Bird protection nets, finishing nets, crop covers, mulch mats, shade nets
• Packtech - Wrapping fabric, jute sacks, tea bag filter paper, woven sacks
• Small firm scaling up with new machinery to meet export demand

Related Government Support Plans with the PLI Scheme for Textile

Final Words

If you are ready to take your textile business to the next level, the Production Linked Incentive Scheme for Textile Sector is a powerful tool. By investing in modern manufacturing and focusing on notified products, you can access direct government incentives, boost your competitiveness, and create more jobs. Make sure to review the guidelines carefully and prepare your application to maximise your chances of success.