Hon’ble Prime Minister Shri Narendra Modi’s vision is to see a transformative India based on economic growth, social welfare, and technological innovation. Some of the notable initiatives that reflect his vision include
Make in India: Aims to increase manufacturing in India and transform the country into a global manufacturing hub. The goal is to encourage both domestic and foreign companies to invest in manufacturing sectors.
Digital India: Focuses on leveraging digital technologies to improve governance, service delivery, and empowerment of citizens. It aims to bridge the digital divide by providing affordable digital access, promoting e-governance, and enhancing digital literacy.
Skill India: Initiative seeks to enhance the employability of India’s workforce by providing skill training and vocational education. The goal is to create a skilled workforce that can meet the demands of various industries and contribute to the country’s economic growth.
Moving the above initiatives to achieve the vision, the Government of India announced Production Linked Incentive (PLI) schemes with an outlay of INR 1.97 lakh Crores, to boost domestic manufacturing in 14 key sectors. The scheme aims to attract investments, enhance domestic production capacities, and create new jobs and skilled workforce during next 5 years in specific industries by providing financial incentives to companies that manufacture goods domestically.
Benefits of PLI
- Enhanced domestic production by 30 trillion during next 5 years.
- Reduce dependence on imports
- 50 lakh plus new Job creation and skill development.
- Enhance technological advancement and innovation.
- Strengthen India’s position in global manufacturing markets
- Increased contribution to the country’s GDP.
Ministry of Heavy Industries announced the scheme on September 2023, with a budgetary outlay of Rs. 25,938 crore. Aims to promote the production of electric vehicles (EVs), hydrogen fuel cell vehicles, and other advanced automotive technologies. The scheme’s objectives are overcoming cost disabilities, creating economies of scale, and building a robust supply chain in areas of Advanced Automotive Technology products.
Eligible products:
- Automobile
- Auto Components
Recent developments:
- Total of 115 companies had filed their application under this scheme. Out of 115, total 85 applicants have been approved under this PLI scheme – 18 applicants for Champion OEM Incentive scheme and 67 applicants have been approved under Component Champion Incentive scheme.
- The scheme has been successful in attracting proposed investment of INR 67,690 crore against the target estimate of investment INR 42,500 crore over a period of five years.
Scheme Details: https://heavyindustries.gov.in/UserView/index?mid=2482
The scheme comes as a follow-through of the liberalized Drone Rules, 2021 released by the Central Government on 25 August 2021. The scheme and new drone rules are intended to catalyze super-normal growth in the upcoming drone sector. The total incentive of INR 120 crores for implementation during 2022-23 to 2024-25, and the total PLI per manufacturer is capped at INR 30 crores.
Objective: The objective of this scheme is to make India a global hub for the research and development, testing, manufacturing, and operation of drones under the Atmanirbhar Bharat Abhiyan. It is estimated that the annual sales turnover of the Indian drone manufacturing industry may grow from approximately INR 60 crore in 2020-21 to approximately INR 900 crore by 2024-25.
Eligible products:
- Drones
- Drone Components
Scheme Details:
The Union Cabinet on 12 May 2021 approved a Scheme for setting up manufacturing facilities for Advance Chemistry Cell (ACC), Battery Storage in India, with a total manufacturing capacity of 50 Giga Watt Hour (GWh) for 5 years.
Ministry of Heavy Industries, on 22nd October 2021 released Request for Proposal (RFP) inviting bids from domestic and international players for setting up manufacturing facilities for Advance Chemistry Cell (ACC) Battery Storage in India under the ACC Production Linked Incentive (PLI) Scheme.
The total incentive payout over the period of 5 years of the Scheme will be Rs. 18,100 crore.
Budgetary Provision | FY | 2022-23 | 2023-24 | 2024-25 | 2025-26 | 2026-27 | 2027-28 | 2028-29 | Total |
Subsidy (INR Cr) | Setting Up of Manufacturing Facilities | 2,700 | 3,800 | 4,500 | 4,300 | 2,800 | 18,100 | ||
Eligible products:
- Advance Chemistry Cell Batteries
Scheme Details: https://heavyindustries.gov.in/UserView/index?mid=2487
The scheme proposes a financial incentive to boost domestic manufacturing to utilize the existing installed capacity to fulfill the increasing domestic demand and attract large investments in the value chain.
Production Linked Incentives of up to INR 40,951 crores will be awarded over a period of 5 years for Large Scale Electronics Manufacturing
Eligible products:
- Specified Electronic Components
Scheme Details: https://static.investindia.gov.in/2020-04/PLI%20Gazette%20Notification%20-%2001.04.20_0.pdf
In India, electronics hardware manufacturing has grown rapidly with a CAGR of around 23% during the last 5 years, with domestic production of electronics hardware touching $76 bn in 2019-20. Domestic demand for electronics hardware is expected to rise rapidly to approximately INR 26, 00,000 crore (USD 400 billion) by 2025. The industry currently provides employment for over 2 million people in India.
Product Linked Incentives of up to INR 7,300 crore will be awarded over a period of 4 years for IT Hardware.
Eligible products:
- Mobile Phone
- Laptops
- Tablets
- All-in-one PCs
- Servers
Scheme Details: https://static.investindia.gov.in/s3fs-public/2021-03/PLI_for_IT_Hardware_Notification_dated_03032020.pdf
Ministry of Food Processing Industries (MoFPI) announced the scheme with an outlay of Rs. 10,900 crore. The implementation during 2021-22 to 2026-27 of the PLI scheme is likely to facilitate the expansion of food processing capacity by nearly INR 30,000 crore and create additional direct and indirect employment opportunities for about 2.5 lakh persons by the year 2026-27.
Objective: The objective of the scheme is to support the creation of global food manufacturing champions; promote Indian brands of food products; increase employment opportunities for off-farm jobs, and ensure remunerative prices of farm produce and higher income to farmers.
Components: The scheme has three broad components
- The first component relates to incentivizing the manufacturing of four major food product segments viz. Ready to Cook/ Ready to Eat (RTC/ RTE) including millet-based foods, Processed Fruits & Vegetables, Marine Products & Mozzarella Cheese.
- The Second component is for incentivizing Innovative/ Organic products of SMEs across all the above four food product segments including Free Range – Eggs, Poultry Meat & Egg Products.
- The third component relates to support for branding and marketing abroad to incentivize the emergence of strong Indian brands
Eligible products:
- Ready to Eat / Ready to Cook (RTE / RTC)
- Marine Products
- Fruits and Vegetables
- Mozzarella Cheese
Scheme Details: https://plimofpi.ifciltd.com/guidelines
India is counted amongst the top 20 global medical devices market and 4th largest medical devices market in Asia. The current market size of the medical devices sector in India is estimated to be $11 billion and its share in the global medical device market is estimated to be 1.6 percent.
Indian medical devices industry is witnessing fast growth with a CAGR of 10-12 percent over the last decade, and has the potential to grow at 28 percent each year to reach $50 billion by 2030 and become the global leader in manufacturing and innovation
The tenure of the will is from 2020-21 to 2025-16, with an expected incentive to the tune of INR 3420 crore.
Target Segment:
- Cancer care / Radiotherapy
- Radiology, Imaging and Nuclear Imaging Devices
- Anaesthetics, Cardio-Respiratory and Renal Care
- All Implants
Eligibility:
Segment | Proposed Incentive Rate (on incremental sales of manufactured foods) | Incremental Investment | incremental Sales of Manufactured Goods |
All 4 segments of medical devices | FY 2022-23: 5% | FY 2022-23: INR 60 Crore | FY 2022-23: INR 8 Crore |
FY 2023-24: 5% | FY 2023-24: INR 120 Crore | FY 2023-24: INR 17 Crore | |
FY 2024-25: 5% | FY 2024-25: INR 180 Crore | FY 2024-25: INR 27 Crore | |
FY 2025-26: 5% | FY 2025-26: INR 230 Crore | FY 2025-26: INR 32 Crore | |
FY 2026-27: 5% | FY 2026-27: INR 280 Crore | FY 2026-27: INR 37 Crore |
At present a major component of Indian exports are low value generic drugs while a large proportion of the demand for patented drugs is met through imports. This is because India Pharmaceutical sector lacks in high value production along with world class pharma R&D.
This scheme is to enhance India’s manufacturing capabilities by increasing investment and production in the sector and contributing to product diversification to high value goods in the pharmaceutical sector
Target Groups:
- Group A: Applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods more than or equal to Rs 5,000 crore.
- Group B: Applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods between Rs 500 (inclusive) crore and Rs 5,000 crore.
- Group C: Applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods less than Rs 500 crore. Within this group, a sub-group for MSME industry will be made given their specific challenges and circumstances.
Quantum of Incentive: The total quantum of incentive (inclusive of administrative expenditure) under the scheme is about Rs 15,000 crore.
The incentive allocation among the Target Groups is as follows-
- Group A: Rs 11,000 crore.
- Group B: Rs 2,250 crore.
- Group C: Rs 1,750 crore.
Scheme Details: https://static.investindia.gov.in/s3fs-public/2021-03/Gazette%20Notification%20of%20PLI%20scheme%20for%20Pharmaceuticals.pdf
The Cabinet has approved the Production Linked Incentive (PLI) Scheme for Specialty Steel in India to be implemented over FY 2023-24 to FY 2029-30 with a budgetary outlay of ₹ 6,322 crore.
The scheme is expected to generate an investment of about Rs. 30,000 Crores with additional capacity creation of about 25 Million Tonnes of specialty steel and 60,000+ jobs in the next 5 years, This will also help in making India a power house of manufacturing and increase the share of Steel in GDP from 2 to 5%.
The Ministry of Steel has signed 57 MoUs’ with 27 companies for specialty steel under the Production Linked Incentive (PLI) Scheme.
Eligible products:
- Coated/Plated Steel Products
- Electrical Steel
- Alloy Steel Products and Steel Wires
- Specialty Rails
- High Strength/ Wear Resistant Steel
Scheme Details: https://steel.gov.in/sites/default/files/PLI%20scheme%20document%20notification.pdf
As part of the Paris Climate Agreement, India has committed to install forty percent of its electricity generation capacity from non-fossil fuels by 2030. For achieving this goal, India has set an ambitious target of setting up 1,75,000 MW of renewable energy capacity, including 1,00,000 MW of solar power, by 2022. Further, a target of 4,50,000 MW installed RE capacity by 2030 has also been fixed.
Solar capacity addition presently depends largely upon imported solar PV cells and modules as the domestic manufacturing industry has limited operational annual capacities of around 2,500 MW for solar PV cells and 9,000-10,000 MW for solar PV modules. With incentives for higher efficiency modules and local value addition under the scheme, it is expected that manufacturers will invest in R&D for achieving more efficiency and source their input material locally.
The Cabinet approved the introduction of the Production Linked Incentive (PLI) Scheme for High-Efficiency Solar PV Modules (Tranche I), with the financial outlay INR 4,500 crore (Tranche I) and Production Linked Incentive (PLI) Scheme for High-Efficiency Solar PV Modules (Tranche II) with the financial outlay INR 19,500 crore. Due to the inbuilt incentive for higher efficiency modules and local value addition, it is expected that manufacturers will invest in R&D for achieving more efficiency and source their input material locally for more PLI benefits.
Eligible products:
- Solar PVs
- Polysilicon + Wafer + Cell + Module Basket
- Wafer + Cell + Module Basket
- Cell + Module Basket
Telecommunication sector has a pivotal role in facilitating the growth of economy. Telecom is key infrastructure and a key enabler of digital connectivity and Digital India. Accordingly, a financial incentive is proposed to boost domestic manufacturing and attract investments in the target segments of telecom and networking products in order to encourage “Make in India”.
The PLI Scheme will be implemented within the overall financial limits of ₹ 12,195 Crores only (Rupees Twelve Thousand One Hundred and Ninety-Five Crore only) for implementation of the Scheme over a period of 5 years.
Recent developments:
- Companies such as Samsung, Nokia and Jabil invested Rs 1,181.25 crore in the country.
- 31 companies comprising 16 MSMEs and 15 Non-MSMEs (8 Domestic and 7 Global companies), gets approval under the Scheme
- The companies under the scheme have made an export of ₹6,911 crore up till May 31, 2023.
Eligible products:
- Core Transmission Equipment
- 4G/5G, Next Generation Radio Access Network and Wireless Equipment
- Access & Customer premises Equipment (CPE), Internet of Things (IoT) Access Devices and Other Wireless Equipment
- Enterprise Equipment: Switches Router
Scheme Details: https://pli-telecom.udyamimitra.in/
India has taken a step towards dominance in the global textile market with the introduction of the PLI scheme. The government has designated the Production Linked Incentive (PLI) Scheme with an approved outlay of INR 10,683 crore.
The scheme methodology will help catapult Indian corporate companies to emerge as the top champions in the heavily crowded space of international textile competition.
Recent developments:
- Ministry has decided to invite fresh applications from interested companies for (the PLI) scheme of textiles and has re-opened the application portal till December 31, 2023.
- 61 applicants approved under Production Linked Incentive (PLI) Scheme For Textiles.
- Proposed total investment expected from the applicants is Rs. 19,077 crore and a projected turnover is Rs. 184,917 crore over a period of 5 years
- Proposed employment of 240,134 is expected
Eligible products:
- Man-made Fibre
- Technical Textiles
Scheme Details: https://texmin.nic.in/
The scheme was announced on April 2021 for White Goods (Air Conditioners and LED Lights) to be implemented over FY 2021-22 to FY 2028-29 with a budgetary outlay of Rs. 6,238 crore.
Objective: Its prime objectives is to promote domestic manufacturing of household appliances (whitegoods), enhancing export, and boost the production of these products within India
Eligible products:
Air Conditioners:
- Air Conditioners Components
- High-Value Intermediates (Copper Tubes, Aluminium Foil, and Compressors)
- Low-Value Intermediates (PCB assembly for controllers, BLDC motors, Service Valves, and Cross Flow fans for AC and other components).
LED Lights:
- LED Lighting Products (Core Components like LED Chip Packaging, Resisters, ICs, Fuses, and large-scale investments in other components etc.)
- Components of LED Lighting Products (like LED Chips, LED Drivers, LED Engines, Mechanicals, Packaging, Modules, Wire Wound Inductors and other components)
Scheme Details: https://dpiit.gov.in/sites/default/files/Guidelines-for-the-PLI-Scheme04062021.pdf