By Nayan Dave
Textile units in Suart have sought the implementation of the Textiles Technology Development Scheme (TTDS) with retrospective effect from April 1. At a recent meeting of industry leaders on the production-linked incentive (PLI) scheme for the textile sector, participants said the scheme was not viable for the fragmented MSME textile industry across India, sources said.
They demanded that the TTDS be implemented immediately or the Amended Technology Upgradation Funds Scheme (ATUFS) be extended, instead of PLI.
Ashish Gujarati, former president of the Southern Gujarat Chamber of Commerce and Industry, said, “Government of India has projected a domestic market size of $250 billion and exports of $100 billion by 2025-26. Currently, the export value of the textile sector of India is around $40 billion and the domestic market size is estimated to be around $120 billion. When such huge expansion of market size is expected, it requires faster adoption of modern technology. The proposed PLI scheme will not be able to facilitate this.”
Gujarati, who owns a weaving unit in Surat, said the textile PLI scheme introduced last year was aimed at promoting manufacturing of garments and specialty yarns that are not being manufactured in India.
“The challenge as of now is regarding capacity building of Indian textiles and apparel industry not only for increasing exports to capture the space being vacated by China, but also to retain India’s share in the domestic market as slowly international brands are capturing the share,” he said.
“PLI scheme offers incentive on sales value only, therefore it will attract only production-based commodity textiles,” says Vallabh Thummer, former president of the Textile Machinery Manufacturers Association. “It will not mobilise investment in specialty products which are either export-oriented or import substitutes. Textile industry value chain after spinning is still fragmented and the majority are still engaged in doing jobs for others. Such smaller entrepreneurs will not be covered under the proposed PLI. Instead, giving them one-time capital-like subsidies under TTDS or ATUFS would work for the entire textile value chain,” Thummer said.
“The biggest problem of the proposed textile PLI scheme is potentiality of creating a market imbalance between the prices offered by the PLI beneficiary and that of non-beneficiary,” said Ashok Jariwala, president of Federation of Gujarat Weavers Association.