PLI, PM MITRA and MMF: Building a Competitive Textile Ecosystem for India
August 01, 2026 | By Textile Sphere India
Avinash Mayekar, Managing Partner, Suvin Expo LLP, in conversation with Textile Sphere India shares his perspective on the evolving Production Linked Incentive (PLI) Scheme, the role of PM MITRA Parks, and India’s MMF growth strategy. He emphasizes the need for realistic policy frameworks, integrated manufacturing ecosystems, and data-driven reforms to enhance the global competitiveness of India’s textile industry.
India stands at a crucial juncture in its textile growth journey, with policy initiatives such as PLI 2.0 and PM MITRA Parks offering significant opportunities for expansion. Mayekar outlines how inclusive incentives, integrated value chains, and practical implementation can help unlock sustainable investment, scale, and export-led growth.
One Size Does Not Fit All: Rethinking PLI Metrics for Textiles
The structure and operating economics of every industry are different. Parameters such as investment, production capacity, turnover, and profitability follow industry-specific ratios. Therefore, applying a generalized Production Linked Incentive (PLI) framework with uniform eligibility criteria across diverse sectors may not deliver the intended outcomes.
In the textile sector, the limitations of the initial PLI Scheme became evident soon after its implementation. While the revised version (PLI 2.0) addressed one of the industry’s major concerns by reducing the minimum investment threshold to ₹50 crore—making the scheme more accessible to MSMEs, which form the backbone of India’s textile industry—the second critical challenge remains the turnover requirement.
The revision of the annual incremental turnover target to 10% is a positive and realistic step, as it aligns with healthy business growth. However, the overall turnover targets prescribed under the scheme continue to be extremely difficult to achieve. Given the diversity of textile technologies, fibre variants, and product segments, only a limited number of exceptionally high-value product portfolios would be capable of meeting these benchmarks.
The textile industry therefore urges the Government to recognize the sector’s unique economic characteristics. Unlike many other manufacturing sectors, textiles operate on relatively modest profit margins despite requiring substantial capital investment. Based on industry experience, the ratio of project cost to annual turnover is typically around 1:1.5, and in the best-performing cases may reach 1:2, but rarely exceeds this level.
Typical Annual Turnover : Project Cost Ratio for Textile segment:
- Spinning: 1.2–2.2×
- Weaving: 2–3×
- Processing: 2–3.5×
- Garment manufacturing: 3–6×
- Nonwovens: 1.5–3×
- Technical textiles: 1.5–3×
Under the current PLI framework, however, the expected relationship between capital investment and sales turnover is significantly higher. The scheme effectively requires an incremental turnover that is nearly four times the investment over the incentive period, along with year-on-year growth targets. Such expectations are not aligned with the commercial realities of the textile industry and make the scheme financially unattractive for many potential investors.
For the PLI Scheme to achieve its objective of attracting investment and strengthening domestic manufacturing, it should adopt sector-specific performance metrics that reflect the operational and financial realities of the textile industry. A more balanced approach to investment-to-turnover ratios would encourage broader industry participation and result in more sustainable long-term growth.
Towards a Data-Driven and Inclusive PLI Framework for Textiles
With the increasing transparency through various Government initiatives, I feel a thorough sector study is now possible to develop policies based on a comprehensive understanding of the sector rather than on generalized assumptions.
A detailed snapshot of the textile industry should be the starting point for policy formulation. This should include an assessment of products currently being manufactured, import dependencies, export demand across global markets, investment trends over the last five years, production capacities created, and the turnover achieved by these investments. Such an evidence-based assessment would provide a realistic picture of the industry’s performance and growth potential.
Based on this cumulative analysis, an appropriate strategy can then be devised with sector-specific targets and incentives. This would be a far more effective approach to policy making than prescribing uniform turnover multiples or percentage growth targets without considering the operational realities of the industry. For instance, expecting turnover levels of nearly four times the capital investment under the current PLI Scheme is not practical for most textile manufacturing segments.
The PLI Scheme should also adopt a more inclusive approach by recognizing the diversity of the textile value chain. Equal emphasis must be given to all fibre types—whether natural, man-made, technical, recycled, or specialty fibres. Any enterprise undertaking value addition within the textile ecosystem should be eligible to participate, irrespective of the fibre it processes.
A truly comprehensive PLI Scheme should encompass the entire textile value chain, from fibre to finished products. India’s objective should be to strengthen the competitiveness of the complete textile ecosystem rather than promoting only a few selected segments. Global leadership cannot be achieved through the dominance of a single product category or fibre segment; it requires balanced growth across the entire industry. An inclusive, value chain-based incentive framework will enable India to expand its global market share, attract wider investments, and build a resilient and globally competitive textile sector.
From Fragmentation to Integration: India’s MMF Growth Strategy
The dominance of China, Vietnam, and Bangladesh in the global MMF market is well established. Competing with these countries will undoubtedly be challenging, given their high productivity, mature MMF ecosystem, integrated supply chains, and decades of focused investment in manufacturing capabilities. Their success has been driven not only by scale but also by the seamless integration of the entire textile value chain, enabling them to meet global sourcing requirements efficiently.
India has significant strengths, but it also faces structural challenges that must be addressed before it can compete effectively at the global level. One of the biggest constraints is logistics and value chain fragmentation. Unlike competing nations, the entire value addition process in India is often not carried out at a single location. Raw materials and semi-finished products frequently move across multiple states for spinning, weaving, processing, finishing, and garmenting, resulting in longer transit times, higher logistics costs, and lower operational efficiency. In some cases, materials even return to their point of origin after multiple stages of processing. Such fragmentation impacts productivity, increases lead times, and reduces India’s competitiveness in global retail sourcing.
In this context, the Government’s PM MITRA Mega Textile Parks initiative and earlier Textile park scheme is a welcome step. By creating integrated textile manufacturing ecosystems with world-class infrastructure, common utilities, and end-to-end value chain facilities, the scheme has the potential to significantly reduce logistics costs, improve productivity, and enhance India’s global competitiveness. However, the true success of the initiative will depend on its timely implementation, efficient governance, and effective industry participation. Robust monitoring and execution will be critical to ensuring that these parks deliver the intended outcomes.
However, PLI alone cannot enable India to challenge the dominance of China, Vietnam, and Bangladesh. It must be complemented by integrated manufacturing clusters, stronger domestic MMF and technical textile supply chains, improved logistics, globally competitive infrastructure, skill development, and sustained innovation.
India does not necessarily need to replicate the hyper-scale manufacturing model of its competitors. Instead, it should leverage its strength in entrepreneurship and its diverse manufacturing base by creating integrated textile ecosystems that collectively deliver scale, flexibility, and value addition.
Making PM MITRA Parks a Catalyst for Textile Growth
The Government has taken a bold and progressive decision by transforming the existing textile park concept into the PM MITRA Mega Textile Parks initiative. This is a step in the right direction, as the focus should always be on achieving tangible industry outcomes rather than merely introducing new schemes. Any policy intervention that enhances competitiveness, productivity, and investment deserves strong support.
However, the success of these parks will depend on selecting locations based on integrated supply chains rather than regional considerations alone. Availability of raw materials, skilled labour, infrastructure, utilities, and logistics should be key factors in determining park locations to maximize productivity and reduce operating costs.
Going forward, policy making should adopt a more collaborative and practical approach. Instead of designing schemes with difficult eligibility criteria that benefit only a few applicants, the Government should study successful textile businesses, understand their investment patterns and supply chain requirements, and use these insights to frame future schemes.
The objective should be to support industry growth through realistic, data-driven policies rather than imposing ambitious turnover targets that do not reflect the operating realities of the textile sector. A practical, evidence-based approach will help create stronger schemes, encourage wider participation, and improve India’s global competitiveness.
#TAGS PM MITRA Mega Textile Parks, MMF ecosystem, PLI Scheme, textile value chain, Project Cost Ratio for Textile segment, PLI Metrics for Textiles, Avinash Mayekar, Suvin Expo LLP, Production Linked Incentive Scheme,