SYLLABUS

GS-3: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

Context: The government has approved 22 new applicants under the third round of the Production Linked Incentive (PLI) Scheme for Textiles, taking the total number of approved companies under Round III to 96.

More on the News

• The newly approved companies are expected to bring investments worth ₹2,339.14 crore, generate a projected turnover of ₹15,561.34 crore in notified products, and create over 36,000 employment opportunities across the textile value chain.
• With these approvals, the total committed investment under Round III has reached ₹12,822.67 crore, while the projected turnover from approved projects is estimated at ₹58,294.18 crore.
• The approved applicants belong to key focus segments such as Man-Made Fibre (MMF) apparel, MMF fabrics, and technical textiles, which are priority areas for strengthening India’s position as a global hub for value-added textile manufacturing.
• Earlier, 74 applicants had been approved in the first two rounds, while 17 additional applicants were approved in November 2025 under Round III with an investment commitment of about ₹2,374 crore.
• The government amended the scheme in October 2025 to enhance participation by expanding eligible products, reducing investment thresholds, lowering incremental turnover requirements, and allowing project units within existing companies.

About the Textile PLI Scheme

• The Production Linked Incentive (PLI) Scheme for Textiles was notified on 24 September 2021 with a budgetary outlay of ₹10,683 crore.
• The scheme aims to promote the production of MMF apparel, MMF fabrics, and technical textile products, enabling the textile industry to achieve scale, improve competitiveness, and generate employment.
• Duration: Incentives are available for five years, from FY 2025-26 to FY 2029-30, based on incremental turnover achieved during the specified period.
  • Companies achieving investment and performance targets ahead of schedule can become eligible for incentives one year earlier.
• Eligible Product Segments
  • MMF Apparel
  • MMF Fabrics
  • Technical Textiles (10 notified segments)
• Investment Categories:
  • Part-I- Minimum investment: ₹300 crore (later reduced to ₹150 crore for new applicants from August 2025). Minimum turnover requirement: ₹600 crore.
  • Part-II- Minimum investment: ₹100 crore (later reduced to ₹50 crore for new applicants from August 2025). Minimum turnover requirement: ₹200 crore.
• Major Reforms Introduced in 2025
  • Addition of 8 new HSN codes for MMF apparel and 9 new HSN codes for MMF fabrics.
  • Applicants allowed to establish project units within existing companies, removing the earlier requirement to create a new company.
  • Minimum investment thresholds reduced by 50%.
  • Incremental turnover requirement for incentives reduced from 25% to 10% from FY 2025-26 onwards.

Significance of the Scheme

• Promotes Investment in Sunrise Textile Segments: The scheme has attracted substantial private investment, with 96 approved companies committing ₹12,822.67 crore under Round III.
• Enhances Global Competitiveness: Promotes value-added manufacturing in MMF apparel, MMF fabrics, and technical textiles, strengthening India’s position in global textile value chains.
• Generates Large-Scale Employment: The 22 newly approved companies alone are expected to create 36,217 employment opportunities across the textile value chain.
• Drives Capacity Expansion and Technological Upgradation: Supports capacity expansion, modernization, and technological advancement in the textile sector.
• Boosts Domestic Manufacturing and Exports: The projected turnover of ₹58,294.18 crore under Round III is expected to strengthen domestic production, support exports, and advance Aatmanirbhar Bharat.

Sources: 
Money Control
PIB