On the cards: PLI-type scheme to replace textile tech fund

The government is likely to replace its flagship incentive scheme for capital investments in textiles and garments - Amended Technology Upgradation Fund Scheme (ATUFS) - with one similar to the production-linked incentive (PLI), to promote domestic development and manufacturing of textile machinery.
The threshold for textile manufacturing units to be eligible for sops under the proposed scheme would be investment in plant and machinery of ₹1 crore to ₹50 crore for MSMEs and above ₹50 crore for non-MSMEs. Incentives would be provided based on the turnover achieved after making the threshold investment in modernisation through installation of benchmarked technology.

Incentives of up to 60% based on the investment and turnover criteria could be doled out across weaving, knitting and spinning, among other textile segments.

Officials said that weak links in the textile value chain are being identified and an announcement is likely in the upcoming Budget 2023-24. "The ATUFS is being reviewed and a new scheme could be announced soon," said an official.


ATUFS was notified in January 2016 with an outlay of ₹17,822 crore to mobilise new investments of about ₹95,000 crore. It has helped create employment for about 3.5 million till 2022. The scheme expired on March 31, 2022.

The government had done a 'technology gap analysis' and identified 60 critical components used in the textile industry which are not indigenously manufactured and which it aims to make in India.

Under the proposed scheme, turnover achieved from job work in select segments would be accounted for while calculating incentives and only the products manufactured by the registered company would be eligible.

The government had last year approved the ₹10,683-crore PLI scheme for manmade fibre (MMF) apparel, MMF fabrics and products of technical textiles.

The second edition of the PLI for textiles is underway wherein incentives are likely for manufacturing of garments and home textiles such as blankets and bed spreads, and textile accessories like lace, button, and zippers.