Textile PLI Scheme Reopens for a Fourth Round with a Lower Turnover Bar for Mid-sized Firms
The Ministry of Textiles will reopen the application portal of the Production Linked Incentive (PLI) Scheme for Textiles for a fourth round, from 1 November to 31 December 2026, on pli.texmin.gov.in.
Under the Part 2 category, the minimum turnover (yearly sales) needed to apply has been cut from ₹200 crore to ₹100 crore. The minimum investment for Part 2 stays at ₹50 crore.
The aim is to bring in more MSMEs and mid-sized units, which could not reach the earlier turnover bar.
Companies approved in Round 4 get a longer scheme tenure, up to 2033-34.
Firms approved in Rounds 1 to 3 that have not yet claimed or received any incentive can shift to Round 4, after withdrawing their earlier application.
The scheme covers man-made fibre (MMF) apparel, MMF fabrics and technical textiles.
Production Linked Incentive (PLI) Scheme
The Production Linked Incentive (PLI) Scheme is a government plan that gives companies a cash reward for producing more in India. The reward is a percentage of the extra sales a company makes from goods made in its Indian factories, compared with a base year. So the more a company invests and produces, the more it earns from the scheme. India runs PLI schemes for 14 sectors, with a combined outlay of about ₹1.97 lakh crore announced in the Union Budget 2021-22.
The textile PLI has struggled to draw enough applicants and to pay out its money. Lowering the Part 2 turnover bar to ₹100 crore and extending the tenure to 2033-34 are attempts to bring in mid-sized firms and give them enough years to earn the incentive.
Man-Made Fibres (MMF) and Technical Textiles
Man-made fibres (MMF) are fibres made in factories from chemicals or wood pulp, not grown on a farm or taken from animals. Polyester, nylon and acrylic come from petrochemicals; viscose comes from wood pulp. Technical textiles are fabrics made mainly for their function, not their look: for example seat belts, PPE kits, surgical masks, geotextiles for roads and agricultural shade nets. Most of the world's textile trade today is in MMF, while India's industry is still heavily based on cotton.
The textile PLI is limited to MMF apparel, MMF fabrics and technical textiles, because these are the segments where India is weakest and world demand is growing fastest. Bringing more mid-sized firms into the scheme is meant to widen India's base in these products.
MSME Sector: Definition, Classification, and Economic Significance
Micro, Small and Medium Enterprises (MSMEs) are businesses classified by two tests: how much they have invested in plant, machinery or equipment, and their yearly turnover. The law behind this is the MSMED Act, 2006. Since 2020, the same limits apply to both manufacturing and services, and a business must stay within both limits to be in a category. MSMEs employ a very large share of India's workers and make up a big part of manufacturing output and exports.
The old Part 2 bar of ₹200 crore turnover kept out almost every MSME, since even a medium enterprise can have turnover up to only ₹500 crore and most are far smaller. Cutting the bar to ₹100 crore still sits above the small-enterprise limit, so the change mainly helps medium enterprises and mid-sized firms just above them.
- Round 4 application window: 1 November to 31 December 2026 (pli.texmin.gov.in)
- Part 2 minimum turnover: ₹200 crore → ₹100 crore; Part 2 minimum investment: ₹50 crore
- Tenure for Round 4 approvals: up to FY 2033-34
- PLI for Textiles: approved 8 September 2021; outlay ₹10,683 crore
- Sectors covered: MMF apparel, MMF fabrics, technical textiles
- 2025 changes: Part 1 investment ₹300 crore → ₹150 crore; Part 2 ₹100 crore → ₹50 crore; incremental turnover requirement 25% → 10%
- PLI schemes overall: 14 sectors, about ₹1.97 lakh crore