The central government on Tuesday released guidelines for its production linked incentives (PLI) scheme for textiles, asking companies to register between January 1 and January 31 next year on an online portal.

       If there are not enough applications, the window will be re-opened. Companies have to inform the ministry of textiles about their annual investment plan, expected sales, turnover, expected employment generation and exports during the scheme’s tenure, according to the guidelines.

       Incentives worth Rs 10,683 crore will be given over five years for manufacturing of man-made fabric (MMF), garments--jerseys, overcoats, trousers, polyester suitings, shirtings, among others. The PLI also supports technical textiles used for personal protective equipment (PPE) kits, airbags, and bulletproof vests.

       The Cabinet approved the PLI in September to help India regain its dominance in global textiles trade, reacting after the country’s share of global exports have gradually declined over the last few years.

       The scheme runs from September 24 this year to March 31, 2030, structured in a way that the incentives will be paid for a period of five years. Applicants will be selected within 60 days from the date of closure of application window.

       According to the guidelines, there are two types of investment possible with different sets of incentive structures. Under the first part, any company willing to invest a minimum Rs 300 crore in plant, machinery, equipment and civil works will be eligible. The company will be eligible to get incentive when they achieve at least Rs 600 crore turnover by manufacturing and selling the products under the scheme.

       Under part 2, any company willing to invest a minimum Rs 100 crore in plant, machinery, equipment and civil works will be eligible. The company will be eligible to get incentive when they achieve at least Rs 200 crore turnover by manufacturing and selling the products under the scheme.

       Under both parts, required turnover will have to be achieved after a gestation period of two years. The gestation period will give the company participating in the scheme time to set up the manufacturing unit and begin production. Under the scheme FY 2022-23 to FY2023-24 will be the gestation period. While the performance year will be from FY25 to FY29, incentive can be claimed from FY26 to FY30.

       In order to avail incentives, minimum investment and minimum turnover criteria has to be met. “In case the participant company fails to achieve the prescribed turnover or 25 per cent increase in turnover over immediate preceding year’s turnover, they will not get any incentive under this scheme for that year. Such participants will get incentive only when they achieve both, i.e. the prescribed turnover target for the year and 25 per cent increase in turnover over immediate preceding year’s turnover, in subsequent years for a reduced number of years,” an official statement said.

       Investments in land and administrative buildings, such as office and guesthouse, are excluded from the scheme. Recovery mechanisms and penal provisions have also been included under the guidelines. In case a company makes excess claim from the scheme, the textiles ministry can raise demand for recovery.