India Proposes subsidies, Tax Sops To Promote Synthetic Yarn Manufacturing

India holds a humble 5-6% market share in the world of synthetic textiles. This has resulted in a decrease in Indian textile exports, a rise in reliance on Chinese imports, and a loss of market share for the home sector. According to two persons with knowledge of the situation, the government is thinking of taking steps to improve the competitiveness of the synthetic yarn industry overall and increase domestic production capacity by providing tax breaks and subsidies for the establishment of advanced manufacturing facilities.

“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 is done to give these units the ability to produce goods that meet international standards and rival those made in China, as per person. The plan is now being discussed, and its details will be decided upon shortly.

The planned incentives are in addition to the textile industry's production-linked incentive (PLI) scheme. The government wants to attract ₹95,000 crore in investments over the next four to six years through the textile PLI plan and the PM Mega Integrated Textile Regions and Apparel (PM-MITRA) Park scheme. This effort intends to revive the sector and establish India as a worldwide textiles sourcing destination.

The ₹10,683 crore program was announced in 2021 and is scheduled to be implemented until 2029–2030. In an effort to boost the textile industry's economic contribution, the government has also set a $250 billion production target by 2030. India's textile exports decreased from $37.16 billion in 2018 to $34.40 billion in fiscal year 2024 (FY24).