Amendments to the Production Linked Incentive (PLI) Scheme for Textiles

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Dated: 27.04.2026

Amendments to the Production Linked Incentive (PLI) Scheme for Textiles

The Ministry of Textiles, Government of India, has issued a significant notification dated October 9, 2025, introducing amendments and additions to the Production Linked Incentive (PLI) Scheme for Textiles. This article provides a comprehensive overview of the updated scheme, focusing on incentives for Man-Made Fibre (MMF) apparel and fabrics, eligibility criteria, operational guidelines, and the impact on the textile industry.

Background: The PLI Scheme for Textiles

The PLI Scheme for Textiles was originally notified on September 24, 2021, with the aim of boosting domestic manufacturing and exports of MMF apparel and fabrics. The scheme incentivizes investments in specified product lines, encouraging companies to modernize and expand their production capabilities.

Key Amendments and Additions

1. Expanded Product Coverage

Additional MMF Apparel and Fabrics: The scheme now includes more MMF apparel items (Annexure-I) and MMF fabrics (Annexure-II). Eligible products are identified by their 8-digit HS codes, ensuring clarity and precision in turnover calculations.
Eligibility for New Applicants: In subsequent rounds, new applicants can apply for incentives on these newly notified HSN codes.
Additional Window for Existing Applicants: Existing participants can make fresh investments (minimum 15% of the prescribed threshold) and apply for incentives on production during the current financial year and prospectively.

2. Investment Thresholds and Scheme Segments

Scheme Part-I: New applicants must invest at least Rs. 150 crore in plant machinery, equipment, and civil works (excluding land and administrative building costs) to qualify.
Scheme Part-II: New applicants must invest at least Rs. 50 crore under similar conditions.
Company Structure: The requirement to form a new company before investment is removed. Instead, applicants must establish a separate project unit within their existing company and maintain distinct books of accounts.
Eligible Investments: Only new investments are considered for incentives.

3. Turnover Requirements and Incentives

Reduced Incremental Turnover Threshold: Starting from FY 2025–26, the minimum additional incremental turnover requirement is reduced from 25% to 10% from the second performance year onwards. This change makes it easier for companies to qualify for incentives beyond the first year.

4. Scheme Duration and Entry Extension

Fixed Tenure: The scheme’s fund outgo and duration remain fixed.
Conditional Entry Extension: New applicants can enter until FY 2025–26, subject to fund availability. Incentives are admissible up to FY 2028–29, providing a longer gestation period and addressing operational hardships.

5. Operational Guidelines

Detailed operational guidelines reflecting these changes will be issued separately.

Product Lists: MMF Apparel and Fabrics

MMF Apparel (Annexure-I)

The scheme covers a wide range of MMF apparel products, including:

Jerseys, pullovers, cardigans (HS 61103010, 61103020)
Men’s and women’s jackets, trousers, shorts, skirts (HS 62019300, 62029310, 62034300, 61046300, 62046300)
Dresses, swimwear, hosiery, blouses, nightdresses, pyjamas, tracksuits, and more
Additional HSN codes for suits, ensembles, T-shirts, accessories, and babies’ garments

MMF Fabrics (Annexure-II)

Eligible MMF fabrics include:

Polyester shirtings and suitings (HS 54075210, 54075220, 54076110, 54076120)
Dyed and printed fabrics, pile fabrics, narrow woven fabrics, nylon brasso, georgette, taffeta
Fabrics mixed with viscose rayon, spun rayon, and other synthetic or artificial fibres
Additional HSN codes for dyed, printed, and specialty fabrics

Impact and Opportunities

For Industry Stakeholders

Lower Barriers to Entry: Reduced turnover thresholds and flexible company structure requirements make it easier for companies to participate.
Broader Product Coverage: Inclusion of more MMF apparel and fabrics expands opportunities for manufacturers.
Extended Incentive Period: Longer eligibility for incentives supports sustained growth and modernization.

For Investors and Existing Participants

Fresh Investment Window: Existing applicants can leverage new investments for additional incentives.
Distinct Project Units: Clear accounting and project separation ensure transparency and compliance.

Conclusion

The amendments to the PLI Scheme for Textiles mark a progressive step towards strengthening India’s textile sector, especially in MMF apparel and fabrics. By lowering entry barriers, expanding product coverage, and extending the incentive period, the scheme aims to foster innovation, attract investments, and boost exports. Stakeholders are encouraged to review the detailed product lists and eligibility criteria to maximize their participation and benefits under the updated scheme.

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Source: Ministry of Textiles

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