Monday 03 / March / 2025
New Delhi: India’s Production Linked Incentive (PLI) Scheme not only benefits the domestic economy but also has positive ripple effects on the global stage, enhancing international trade, investment, and innovation. By fostering the growth of key sectors such as electronics, pharmaceuticals, and renewable energy, the PLI scheme contributes to the global supply chains, creating more efficient, competitive, and diversified markets.
India’s manufacturing sector is at the cusp of a revolutionary transformation supported by the strategic vision of the government to boost industrial growth, create jobs, and position the nation as a global manufacturing hub. Production Linked Incentive (PLI) Scheme is an ambitious policy launched in 2020, designed to strengthen the country’s manufacturing landscape. The PLI scheme is a long-term strategy aimed at reducing dependence on imports, increasing export capacity, fostering technological innovation, and enhancing competitiveness in key industries.
The Production Linked Incentive (PLI) Scheme has proven to be a powerful tool for fostering industrial growth, enhancing global competitiveness, and creating jobs within India. Given its remarkable success in transforming India's manufacturing landscape, it sets valuable lessons for countries to adopt similar schemes such as incentivizing production, driving innovation, and boosting export.
This initiative is part of the government’s broader vision of Atmanirbhar Bharat (Self-reliant India) and is aligned with the Make in India program, a push to encourage domestic production while ensuring global standards. Through the PLI Scheme, India is aiming to drive up industrial production, create high-quality jobs, and establish the nation as a formidable force in the global supply chain.
Sectors Covered Under PLI Scheme
With an outlay of ₹1.97 lakh crore (over US$24 billion), the PLI Scheme focuses on 14 strategically selected sectors that have the potential to boost India’s manufacturing output and enhance its technological prowess. PLI covers a wide range of sectors, each crucial for enhancing India’s manufacturing prowess and fostering economic growth.
These sectors include India's Production-Linked Incentive (PLI) Scheme encompasses 14 sectors aimed at enhancing domestic manufacturing, attracting investments, and creating jobs. These sectors include automobile and auto components, advanced chemistry cell (ACC) battery storage, telecommunications and network equipment, textiles, food processing, white goods (such as air conditioners and LED lights), pharmaceuticals, medical devices, solar modules, specialty steel, electronics (including mobile phones and components), chemical and petrochemical products, drone and aviation, and high-efficiency solar PV modules. The PLI scheme is designed to promote self-reliance in key industries and foster export growth.
Together, these sectors are driving India’s industrial revolution, positioning the country as a global leader in manufacturing and innovation.
Strategic Investments--The financial outlay for the PLI schemes is a clear indication of the government’s commitment to boosting India’s industrial growth. Significant allocations have been made for sectors such as mobile manufacturing, pharmaceuticals, and automotive components. The funds aim to enhance the technological capabilities of domestic manufacturers, encourage innovation, and attract both domestic and foreign investments.
Mobile manufacturing, which is one of the main focus areas of the scheme, has seen a massive boost in investments. Similarly, the renewable energy sector, particularly solar PV manufacturing, is being empowered to not only meet India’s energy needs but also cater to the global market. These allocations are pivotal in creating an ecosystem that fosters both domestic manufacturing and international competitiveness.
Achievements and Impact--The PLI Scheme has already made significant strides in reshaping India’s manufacturing landscape, yielding impressive results in terms of investment, production, and exports. As of August 2024, total investments amounting to ₹1.46 lakh crore(US $ 17 Billion) have been realized. This has led to an incredible boost in production, with sales reaching ₹12.50 lakh crore (US $ 144 billion). Moreover, these investments have resulted in the creation of approximately 9.5 lakh jobs (0.95 Million), both directly and indirectly.
Exports, too, have seen a substantial increase, surpassing ₹4 lakh crore (US $ 17 Billion), thanks to the success of industries like electronics, pharmaceuticals, and food processing. These achievements signify the effectiveness of the PLI scheme in enhancing India’s global competitiveness.
Largescale electronics manufacturing--One of the standout success stories of the PLI scheme has been in the electronics manufacturing sector. India has transitioned from being a net importer to a net exporter of mobile phones. Domestic mobile phone production has skyrocketed from 5.8 crore (58 million) units in 2014-15 to an estimated 33 crore (330 Million) units in 2023-24. With imports dropping significantly and exports rising to 5 crore (50 Million) units, India is now one of the leading global players in the mobile phone market. The increase in foreign direct investment (FDI) in this sector has been substantial, seeing a rise of 254%, highlighting the PLI scheme’s success in boosting both local and international investment.
Pharmaceuticals, Medical Devices, and Bulk Drugs--The PLI scheme has been pivotal in bolstering India’s standing as a global leader in pharmaceuticals. India is now the third-largest producer of pharmaceuticals by volume, and exports account for 50% of total production. Moreover, the scheme has helped reduce the country’s reliance on imports for essential bulk drugs, including critical medications like Penicillin. In addition, the scheme has supported local manufacturing of advanced medical devices such as CT scanners and MRI machines, which were previously imported. This has not only enhanced India’s self-reliance but also contributed to cost reductions and increased global competitiveness.
Automotive Industry--The automotive sector has seen remarkable growth, with the government committing over ₹25,938 crore (US$ 3 billion) under the PLI scheme. This has led to substantial investments in the production of high-tech automotive products, including electric vehicles (EVs). With 85 companies approved for incentives, this sector is expected to attract a total investment of ₹67,690 crore (US$ 8 billion), far surpassing initial targets. The automotive PLI scheme is set to strengthen India’s presence in the global automotive market, especially in the electric vehicle space.
Renewable Energy and Solar PV--Under the PLI scheme for solar photovoltaic (PV) modules, India has made significant strides towards its renewable energy goals. The initial phase saw an outlay of ₹4,500 crore (US$ 534 million), which established essential manufacturing capacity. In the second phase, the government is investing ₹19,500 crore (US$ 2.31 billion) to set up 65 GW of integrated solar PV manufacturing. This initiative is expected to reduce India’s reliance on imported solar panels, create thousands of jobs, and help meet the nation’s renewable energy targets.
Telecom and Networking Products--in the telecom sector, the PLI scheme has contributed to India achieving 60% import substitution in telecom products. Global technology companies have established manufacturing units in India, making the country a key exporter of 4G and 5G telecom equipment. This progress has not only strengthened India’s telecom infrastructure but also reinforced its position in the global supply chain for telecom products.
Drones and Drone Components--the drone sector has seen exponential growth under the PLI scheme, with turnover increasing seven-fold. This success has largely been driven by micro, small, and medium-sized enterprises (MSMEs) and start-ups, attracting significant investments and creating thousands of jobs. India is now poised to become a global leader in drone manufacturing, with applications spanning agriculture, defense, and logistics.
In conclusions, the Production Linked Incentive (PLI) Scheme has proven to be a transformative force in reshaping India’s manufacturing sector. By targeting key industries such as electronics, pharmaceuticals, automobiles, renewable energy, and drones, the PLI scheme has driven substantial investments, improved production capabilities, and created millions of jobs. More importantly, it has elevated India’s competitiveness on the global stage, positioning the nation as a critical player in global supply chains.
The PLI scheme is a vital component of India’s journey toward self-reliance under the Atmanirbhar Bharat vision. It highlights the country’s commitment to innovation, technological advancements, and industrial excellence. As India continues to strengthen its industrial capabilities, the PLI scheme will remain a cornerstone of the nation’s growth, helping the country secure a place as a global leader in production and exports. With sustained investment in innovation and manufacturing, the future looks bright for India's industrial sector.
