India plans subsidies, tax sops to boost synthetic yarn manufacturing
textile exports, and a loss of market share for the domestic industry. To address these issues, the government is considering measures to boost domestic production capabilities of synthetic yarns by offering subsidies and tax incentives to set up advanced manufacturing units, and strengthen the sector's overall competitiveness, according to two people aware of the matter. “The government is working on a plan to revamp small, informal weaving and processing units by upgrading their technology," one of the persons cited above said.
This aims to enable these units to manufacture products of global standards and compete with Chinese products, the person added. Currently, the proposal is in the discussion stage, and its contours will be finalized soon. These proposed incentives are over and above the production-linked incentive (PLI) scheme for the textile industry.
The government aims to attract ₹95,000 crore in investments over the next four to six years under the textile PLI scheme and the PM Mega Integrated Textile Regions and Apparel (PM-MITRA) park scheme. This initiative seeks to rejuvenate the sector and position India as a global textiles sourcing destination. Announced in 2021 with an outlay of ₹10,683 crore, the scheme is to be implemented till 2029-30.
The government has also set a textiles production target of $250 billion by 2030, aiming to increase the sector's contribution to the economy. India's textile exports fell to $34.40 billion in fiscal year 2024 (FY24) from $37.16 billion in 2018. “With less than 40% of Indian textile exports being synthetic, despite developed countries' preference for such materials, India misses out on a substantial market segment.
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