Production Linked Incentive (PLI) Scheme for Textiles Part-1

The Production Linked Incentive (PLI) Scheme for Textiles Part-1 promotes the manufacturing of MMF apparel, MMF fabrics, and technical textiles in India. It gives performance-based cash incentives to companies that meet specific investment and turnover growth targets. The Ministry of Textiles has made major amendments to the scheme in 2025, and the application window was extended up to 31 March 2026.

Production Linked Incentive (PLI) Scheme for Textiles Part-1 is a central government scheme run by the Ministry of Textiles. It is designed to help the textile industry reach global economies of scale, improve competitiveness, and create jobs. Selected companies receive performance-based financial incentives based on incremental turnover of the notified products made in India.

The scheme is divided into two parts based on the scale of investment. Part-1 is for the higher investment category, while Part-2 covers the smaller investment category. The program is managed by a Project Management Agency (PMA) and monitored by an Empowered Group of Secretaries (EGoS) to keep the process clear and efficient.

Production Linked Incentive (PLI) Scheme for Textiles Part-1 - Introduction

Ministry of Textiles launched the PLI Scheme for Textiles in September 2021 to boost the production of MMF apparel, MMF fabrics, and technical textiles. The scheme was notified on 24 September 2021, with the operational guidelines issued on 28 December 2021. Since then, the guidelines have been amended several times, with the latest major revisions notified in 2025.

These 2025 amendments were made to lower entry barriers, make compliance easier, attract fresh investment, and speed up growth in the sector. The revised framework reduced the minimum investment needed and relaxed the turnover growth criteria, making it easier for mid-sized companies and MSMEs to take part.

Key Information

2025-26 Major Amendments

The Ministry of Textiles notified key changes to the scheme in 2025 to make it easier for more companies to join. The main changes are given below.

Reduced Investment Threshold

With effect from 1 August 2025, the minimum investment for new applicants in the Part-1 category has been halved from ₹300 crore to ₹150 crore. For the Part-2 category it has come down from ₹100 crore to ₹50 crore. This reduces the entry barriers for new companies.

Relaxed Turnover Growth Condition

From financial year 2025-26 onwards, new applicants only need to show a minimum 10% incremental turnover over the previous year to qualify for incentives from the second year. Earlier this requirement was 25%. This makes it easier for companies to meet the performance conditions.

Expanded Product List

The list of eligible products has been widened with the addition of 8 new HSN codes for MMF apparel and 9 new HSN codes for MMF fabrics. This gives manufacturers more products to choose from under the scheme.

Flexibility in Company Structure

Applicants can now set up project units within existing companies. The earlier requirement to create a separate new company has been removed, which cuts down the paperwork and speeds up execution.

Benefits

Eligible manufacturers receive cash incentives based on the incremental turnover of notified products produced in India. The incentive is available for a maximum period of 5 consecutive years, provided all the performance conditions are met. The incentives are paid through the Direct Bank Transfer route using the Public Financial Management System (PFMS).

Incentive Structure for Part-1

• Year 1: 15% incentive for ₹600 crore turnover.
• Year 2: 14% incentive for ₹750 crore turnover.
• Year 3: 13% incentive for ₹937.5 crore turnover.
• Year 4: 12% incentive for ₹1171.87 crore turnover.
• Year 5: 11% incentive for ₹1464.84 crore turnover.

Key Conditions

• Participants must meet the minimum investment and turnover targets.
• From the second year onwards, at least 10% incremental turnover growth over the previous year is required (reduced from the earlier 25%).
• Incremental turnover that is eligible for incentives is capped at 35% growth.
• Incentives are paid by Direct Bank Transfer through the Public Financial Management System (PFMS).
• Claims are processed within 45 days by the PMA, with payment following approval.

Eligibility

The eligibility rules for the Part-1 category are given below. Companies must meet these conditions to apply under the scheme.

• The applicant must be a company, firm, LLP, or trust incorporated in India. After the 2025 amendments, a project unit can now also be set up within an existing company, without forming a new entity.
• A minimum investment of ₹150 crore is required (reduced from the earlier ₹300 crore), excluding land and administrative buildings.
• The applicant must achieve a minimum turnover of ₹600 crore in the first performance year.
• The entity must manufacture only notified textile products.
• Minimum value addition requirements (60% or 30% for processing) must be met.
• Possession of valid PAN, GST, and DIN is mandatory.
• Preference is given to investments in aspirational districts and Category C cities.

Exclusions

Some applicants cannot take part in the scheme. Companies that fall in the following categories are not eligible to apply.

• Applicants currently declared bankrupt or classified as defaulters.
• Companies blacklisted by any central or state government authority.
• Revenue earned from trading activities or third-party job work does not count for turnover calculation.

Application Process

The application for the PLI Scheme for Textiles is submitted online through the official portal. The application window for fresh proposals was extended up to 31 March 2026. The steps to follow are given below.

STEP 1 - Visit the official scheme website at pli.texmin.gov.in and open the application section on the portal.

STEP 2 - Complete the online application form with the required company and project details.

STEP 3 - Upload all the required supporting documents, including the signed undertaking, certificates, and financial statements.

STEP 4 - Pay the required application fee of ₹50,000 online through the provided payment gateway.

STEP 5 - Submit the application and keep the generated Application ID safe for future reference and queries.

STEP 6 - After selection by the committee, applicants receive a formal Letter of Approval from the ministry.

STEP 7 - Once manufacturing starts and the performance thresholds are met, submit annual incentive claims through the online portal.

References

The official notifications, guidelines, and press releases for the PLI Scheme for Textiles are given below.

• Official Scheme Notifications
• Detailed Operational Guidelines PDF
• PIB Press Release on Major Amendments

FAQ's

What is the minimum investment for Part-1?

After the 2025 amendment, the minimum investment for new Part-1 applicants is ₹150 crore, which excludes the cost of land and administrative buildings.

How is the incentive paid?

Incentives are paid by Direct Bank Transfer (DBT) through the Public Financial Management System (PFMS) after the claims are approved.

Is there a growth condition for the incentives?

Yes. From financial year 2025-26 onwards, applicants need to show at least 10% incremental turnover growth over the previous year to qualify, starting from the second year.

Can trading income be included in the turnover?

No. Turnover from trading activities or third-party job work is strictly excluded from incentive calculations.

What is the maximum duration for claiming incentives?

Incentives are available for a maximum period of 5 consecutive years, provided all the performance conditions are met.