In alignment with India’s vision of becoming ‘Atmanirbhar’ (self-reliant), the government has launched Production Linked Incentive (PLI) Schemes across 14 key sectors, aiming to bolster the country’s manufacturing capabilities and boost exports. With an allocated budget of Rs. 1.97 lakh crore (over USD 26 billion), these schemes are designed to attract substantial investments in critical sectors and foster economic growth.
The PLI Scheme encompasses a diverse range of sectors, including:
- Mobile Manufacturing and Specified Electronic Components
- Critical Key Starting Materials/Drug Intermediaries & Active Pharmaceutical Ingredients
- Manufacturing of Medical Devices
- Automobiles and Auto Components
- Pharmaceuticals Drugs
- Specialty Steel
- Telecom & Networking Products
- Electronic/Technology Products
- White Goods (Air Conditioners and LEDs)
- Food Products
- Textile Products, particularly the Man-Made Fiber (MMF) segment and technical textiles
- High Efficiency Solar PV Modules
- Advanced Chemistry Cell (ACC) Battery
- Drones and Drone Components
The primary objective of the PLI Schemes is to incentivise large-scale manufacturing in these crucial sectors, thus enhancing India’s position in the global market. By encouraging investment in advanced technology and fostering economies of scale, the PLI initiatives aim to make Indian companies globally competitive. As of March 2024, the scheme has successfully attracted investments worth Rs. 1.23 lakh crore, resulting in the approval of 755 applications across the 14 sectors. These investments are projected to generate employment for approximately 8 lakh individuals, significantly contributing to the nation’s economic growth.
Selection Criteria
The selection of beneficiaries under the PLI Schemes is based on several criteria, including the commitment to make the necessary investments, the production of approved product categories, eligible net worth, and the level of domestic value addition. These criteria, outlined in the Scheme Guidelines provided by the implementing Ministries and Departments, ensure that the selected firms are well-positioned to leverage the incentives for growth and innovation.
For instance, the PLI Scheme for Automobiles and Auto Components (PLI-Auto) and the PLI Scheme on the National Programme on Advanced Chemistry Cell (PLI-ACC) Battery storage are both administered by the Ministry of Heavy Industries. These schemes consider the expenditure incurred by beneficiary firms on Research and Development (R&D) as an eligible investment, enabling firms to adopt the latest technologies in their projects. This focus on R&D is crucial for maintaining a competitive edge in the rapidly evolving global markets.
Sector-Specific Progress
The PLI Scheme for Mobile Manufacturing and Specified Electronic Components has attracted significant attention, positioning India as a global hub for smartphone and electronics manufacturing. This sector alone has seen substantial investments, with major global and domestic players setting up or expanding their manufacturing bases in India.
Similarly, the Pharmaceuticals and Medical Devices sectors have received a considerable boost, with the government prioritizing the production of critical drug intermediaries and active pharmaceutical ingredients. This focus not only enhances India’s healthcare sector but also reduces dependency on imports, ensuring a more resilient supply chain for essential medicines.
The Specialty Steel and Telecom & Networking Products sectors are also expected to see robust growth, driven by the PLI incentives. Investments in high-efficiency solar PV modules and ACC batteries align with India’s renewable energy goals, promoting sustainable energy solutions and reducing carbon footprints.
The Textile Products sector, particularly the MMF segment and technical textiles, is poised for significant expansion, catering to both domestic and international markets. The inclusion of Drones and Drone Components under the PLI Scheme highlights India’s commitment to emerging technologies, positioning the country as a key player in the global drone industry.
The PLI Schemes represent a strategic initiative by the Government of India to catalyse growth in key manufacturing sectors, driving investments and enhancing the country’s export capabilities. The schemes are poised to make India a global manufacturing powerhouse by providing targeted incentives and fostering a favourable business environment. The successful implementation of these schemes will not only boost India’s economic growth but also generate significant employment opportunities, contributing to the country’s overall socio-economic development.
