Several textile stocks surged on Wednesday as that the Union Cabinet approved the Production Linked Incentive Scheme for textiles. Earlier in the day, sources had told CNBC-TV18 that incentives worth Rs 10,683 crore will be provided to the textile industry.
The government expects that the scheme will result in a fresh investment of above Rs 19,000 crore and additional production turnover of over Rs 3 lakh crore in 5 years, the sources had said.
At 14:26 IST, shares of textile players like Arvind, Raymond, Bombay Dyeing & Mfg Co, Bombay Rayon Fashions, Grasim Industries, Welspun India, Trident, KPR Mill, Nitin Spinners, Gokaldas Exports and Himatsingka Seide gained nearly 1-6 percent.
The output linked scheme will help bolster domestic manufacturing and benefit textile players in India.
The scheme is expected to provide employment to 7.5 lakh people.
States like Gujarat, Uttar Pradesh, Maharashtra, Punjab, Telangana, Tamil Nadu are Orissa are likely to benefit from the production linked scheme, said Piyush Goyal, Minister of Commerce & Industry, Consumer Affairs & Food & Public Distribution and Textiles.
The Indian textiles and apparel industry is reportedly one of the largest in the world and is also a key contributor to India’s export, by constituting about 12 percent of export earnings.