“PLI Reforms Can Accelerate India’s Textile Competitiveness, But Ecosystem Strengthening Is Critical”
August 01, 2026 | By Textile Sphere India
In this interaction with Textile Sphere India, Dr. Gurudas Aras, Independent Director and Strategic Advisor, shares his perspectives on the recalibrated PLI Scheme, MMF competitiveness, manufacturing scale, and the role of PM MITRA Parks. He explains why policy alignment, infrastructure, and ecosystem development are essential for India’s global textile ambitions.
While welcoming the government’s move to make the PLI Scheme more inclusive, Dr. Aras emphasises that incentives alone cannot transform the industry. He highlights the need for tariff rationalisation, integrated manufacturing clusters, stronger supply chains, and policy consistency to build globally competitive textile enterprises.
Lower Thresholds, Wider Impact: The New PLI Advantage
The government’s decision to recalibrate the PLI Scheme demonstrates a pragmatic and industry-responsive approach. The original scheme was ambitious but favoured large corporates due to its high investment thresholds. As a result, many capable mid-sized textile manufacturers, despite having strong technical expertise and export experience, remained outside the scheme.
By lowering the investment thresholds and making the eligibility criteria more realistic, the government has significantly widened the pool of potential participants. This democratisation of the PLI is likely to attract a larger number of companies from India’s strong MSME and mid-market segment, which forms the backbone of the textile industry.
However, lowering thresholds alone cannot ensure the scheme’s long-term success. Several complementary factors, such as faster approval & disbursement, policy stability, simplified compliance, better access to finance, strong export support and market access through FTAs, will determine its effectiveness:
In my view, the course correction is a significant step in the right direction. It improves participation, but the real success will depend on how effectively the entire textile ecosystem is strengthened alongside the PLI.
PLI with a Brake: Addressing MMF Raw Material Cost Disadvantages
This is one of the biggest structural challenges facing India’s MMF textile sector. The PLI encourages manufacturers to invest in value-added products such as MMF garments and technical textiles. However, if the basic raw materials like PTA, MEG and certain synthetic fibres continue to attract relatively higher duties than finished products or competing imports, the manufacturers start with a cost disadvantage.
The consequences are significant:
- Higher input costs reduce international price competitiveness.
- Profit margins shrink despite receiving PLI incentives.
- Export competitiveness weakens, particularly in price-sensitive markets.
- Manufacturers may hesitate to undertake large-scale expansion despite policy support.
The PLI incentive partially offsets these disadvantages, but it cannot permanently compensate for structural cost inefficiencies. A globally competitive MMF value chain requires policy alignment across the entire supply chain—from petrochemicals to fibre, yarn, fabric, garments, and exports.
If India aims to become a major global MMF manufacturing hub, tariff rationalisation should complement the PLI scheme. Incentives and duty structures should work together rather than in opposite directions. PLI incentives are a booster, but without duty correction, they remain a booster with a brake.
Building Scale for Global Competitiveness
Lowering the entry barriers certainly makes the PLI more inclusive, but competing with China, Vietnam, or Bangladesh requires much more than increasing the number of participating companies.
Global apparel sourcing today is driven by four critical factors: scale, speed, consistency, and cost competitiveness. Large international retailers increasingly prefer sourcing from manufacturers capable of delivering millions of garments with consistent quality, short lead times, and reliable compliance standards. China built this capability over several decades through massive industrial clusters, integrated supply chains, world-class logistics and continuous technology investments.
India’s strength lies in its entrepreneurial base of thousands of efficient medium-sized manufacturers. Rather than replicating China’s model exactly, India can pursue a cluster-based scaling strategy. If several medium-sized manufacturers operate within integrated textile parks, sharing logistics, processing, testing, warehousing, and common infrastructure, they can collectively achieve economies of scale comparable to much larger manufacturing units.
Therefore, a democratised PLI should be viewed as the first step. The next step is creating manufacturing ecosystems that enable these companies to compete collectively on a global scale. Mid-market PLI can win battles of variety, but scale will decide the war of volume.
PM MITRA and PLI: A Winning Formula for Textile Growth
The integration of PLI beneficiaries with PM MITRA Parks could become one of the most transformative developments for India’s textile industry. One of India’s biggest disadvantages compared with competing countries is fragmented manufacturing. Raw material suppliers, processors, garment manufacturers, logistics providers and testing facilities are often located across different states, resulting in higher logistics costs and longer lead times. PM MITRA Parks aim to address this challenge precisely by creating integrated “farm-to-fabric-to-fashion-to-foreign” ecosystems.
Fast-tracking PLI-approved companies into these parks would generate multiple advantages: lower logistics costs, faster production cycles, shared utilities and common infrastructure, better environmental compliance through common treatment facilities, improved testing and certification, stronger collaboration across the value chain, and greater attractiveness for global buyers seeking integrated sourcing destinations.
However, infrastructure alone is not the complete solution. India’s competitiveness will ultimately depend on a combination of Competitive raw material pricing, Modern textile machinery and automation, Skilled manpower, Innovation in MMF and technical textiles, Efficient logistics, Trade agreements providing market access and Stable & predictable policy support.
PM MITRA Parks can become the physical backbone of India’s textile transformation, while the PLI provides the financial catalyst. Together, they can create a globally competitive manufacturing ecosystem. PLI gives the push, MITRA provides the platform — together they can make India globally competitive.
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