11th September 2021, Mumbai:
The textile industry is buzzing with anticipation as the PLI programme is approved by the government. The plan, which is aimed at high-net-worth individuals, has struck the right chord.
Indo Count Industries, Welspun India, and Himatsingka Seide in the home textiles segment; Vardhman Textiles, KPR Mill, and Ambika Cotton in the yarn and fabric segment; and Gokaldas Exports, KPR Mill, and SP Apparels in the apparel segment have already expressed interest in the scheme and have the potential to invest.
MMF and technical textile, the two sectors targeted for incentives ranging from 3 to 11% of incremental revenues year-on-year for five years, are the sectors with the most potential for the textile industry on a global platform, and the companies expect a significant increase in their reach and profitability in the next decade.
In fact, the inclusion of both the MMF and technical textile sectors in the PLI program emphasizes their relevance in increasing India's global textile trade share. Textiles have historically been one of India's major foreign exchange earners, but its proportion of exports has plummeted from 24% in 2000 to just 11% in 2020, highlighting the need to reflect and move quickly.
As global trends, demand, the textile supply chain must go beyond cotton and cotton blends, as clothing production increasingly relies on MMFs. Only a fifth of all textile items in India's conventional textile export basket is composed of synthetic fiber, with the remainder being cotton.
Many opponents of the PLI program argue that only large corporations would gain from it, forgetting that all exporters are losing revenue due to the shortage of MMF textiles in the nation. If financially successful firms invest backstream, every company in the chain will profit as a whole, with more goods to offer in the total textile and clothing basket.
The government has addressed several structural difficulties in the MMF industry in recent months, which have stifled the sector's expansion. The elimination of anti-dumping duties on Purified Terephthalic Acid (PTA) and Viscose Staple Fibre (VSF), as well as the rejection of proposed anti-dumping duties on PSF, MEG, and other products, have made MMF fiber and yarn inexpensively available to domestic players at internationally competitive prices.
The government has also earmarked Rs.1,480 crore under the Technology Mission on Technical Textiles to encourage R&D efforts in the industry, which is a foresightful step. This is a clear acknowledgment of the importance of technical textiles in the overall growth of various sectors of the economy, including infrastructure, water, health and hygiene, defense, security, cars, aviation, and so on.
The establishment of the PLI program has provided the most recent push. In five years, the programme is anticipated to attract over Rs. 19,000 crore in new investment, an Rs. 3 lakh crore increase in production turnover, and 7.5 lakh extra jobs, considerably increasing the size of the textile sector.
Incentives of around Rs. 70 billion for MMF apparel and around Rs. 40 billion for technical textiles are on offer under the scheme, and experts believe it will have a positive impact on the industry, particularly in states like Gujarat, Uttar Pradesh, Maharashtra, Tamil Nadu, Punjab, Andhra Pradesh, Telangana, and Odisha, where many new projects are being developed. Roughly 40 MMF clothing product types are projected to be covered under the plan, with around 10 in the technical textile category.
There is little question that the PLI program is important for the textile industry's future since India's historic position in the sector has been eroded by newcomers like Bangladesh and Vietnam. Despite having a comprehensive supply chain in textiles all the way up to the retail level, the industry has lost momentum in the last decade.
However, with corporations increasingly entering the game with significant investment, the future appears bright.