Rules May Ease for MSMEs; Extension of Textile PLI Scheme by Four Years Under Consideration
The central government is considering extending the Production-Linked Incentive (PLI) scheme for the textile sector by approximately four years. As part of this proposed extension, eligibility criteria may be relaxed to encourage greater participation from Micro, Small, and Medium Enterprises (MSMEs). According to individuals familiar with the matter, the possibility of launching a fourth phase of the scheme is also being explored.
The current scheme is scheduled to run until the 2029-30 financial year. Under the proposed changes, companies that were not approved in earlier phases may be granted another opportunity to apply. However, final government approval for the extension and the adjustments to eligibility criteria has not yet been confirmed.
Approved in September 2021 with a budgetary outlay of ₹10,683 crore, the scheme initially included a two-year preparatory period (FY 2022-23 and FY 2023-24), followed by a five-year performance period spanning from FY 2024-25 to FY 2028-29.
The textile PLI scheme aims to promote the large-scale production of man-made fiber (MMF) garments, MMF fabrics, and technical textiles. Its objectives include enhancing domestic manufacturing capacity, attracting investment, and strengthening India’s competitive position in the global textile market.
According to an official familiar with the situation, the government is considering revising the eligibility thresholds for minimum investment and turnover to make the scheme more accessible to MSMEs. This could provide an opportunity for small and medium-sized enterprises—which were previously unable to meet the existing requirements—to participate in the scheme. In the first three phases of the scheme, 170 applicants have been approved. These applicants have committed to a total proposed investment of ₹41,533 crore—more than double the scheme’s initial investment estimate of ₹19,000 crore. However, there is a difference between the proposed investment and the actual investment made; as of March 31, 2026, the actual investment recorded under the scheme stood at ₹8,117.64 crore.
A state-wise breakdown shows that the approved applicants include 46 from Gujarat, 27 from Maharashtra, and 23 from Madhya Pradesh. It would be prudent to cross-check these figures against the relevant official records before citing them.
If the proposed expansion is approved, it could help boost investment in the textile sector and increase the participation of MSMEs. The final details regarding the new duration of the scheme, the fourth phase, and the revised eligibility criteria will only become clear following an official government announcement.
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