The Production Linked Incentive (PLI) Scheme has achieved investments of ?1.76 lakh crore by March 2025 across 14 sectors, generating over 12 lakh jobs and transforming India’s industrial base.

PLI: A Catalyst for India’s Manufacturing Renaissance

Genesis and Rationale of PLI Scheme

• Service-led Imbalance: India’s services sector contributes over 50% of GDP, while manufacturing remained at 15–17%, limiting job creation.
• Policy Response: PLI launched in April 2020 to boost self-reliance, scale up domestic industries, and integrate into global value chains.
• Initial Sectors: Began with mobiles, pharma APIs, and medical devices, later expanded to 14 sectors including automobiles, textiles, semiconductors, and white goods.

Sectoral Impact and Achievements

• Electronics & Mobile Manufacturing: Production surged 146% from ?2.13 lakh crore (FY 2021) to ?5.25 lakh crore (FY 2025); India emerged as a global smartphone hub.
• Automobile & EV Components: Investments of ?67,690 crore; incentives for 19 categories of Advanced Automotive Technology vehicles and 103 categories of components; aligned with FAME.
• Pharmaceuticals: Shift from net importer in FY 2021-22 (?1,930 crore deficit) to net exporter in FY 2024-25 (?2,280 crore surplus); domestic value addition at 83.7%.
• Semiconductors: Six approved projects and four new fabs; ?4,600 crore sanctioned; direct employment for 2,034 professionals; complements India Semiconductor Mission.
• Solar PV Modules: Nearly 48 GW of capacity planned; ?48,120 crore committed investment; ~38,500 direct jobs.
• Textiles & Food Processing: Support for MMF, technical textiles, and food processing; strengthening MSMEs and promoting exports.

Performance Outcomes

• Investment Mobilisation: ?1.76 lakh crore realised (March 2025).
• Production Growth: Sales by PLI participants exceeded ?16.5 lakh crore.
• Job Creation: Over 12 lakh direct and indirect jobs generated, including in Tier-2 and Tier-3 cities.
• Ecosystem Development: Creation of semiconductor parks, textile clusters in Surat, and medical device hubs in Andhra Pradesh and Tamil Nadu.
• FDI Attraction: Fresh inflows endorsed India as a preferred destination for high-value manufacturing.

Strategic Importance

• Self-Reliance: Reduces import dependency, especially in pharma APIs, semiconductors, and electronics.
• Global Competitiveness: Enhances India’s position in global value chains, particularly in electronics and renewable energy.
• Employment and Skill Creation: Anchors supply chains across MSMEs and generates skilled jobs.
• Green Economy Push: Boosts EV, solar, and energy-efficient appliances production, aligning with climate goals.

Challenges and Limitations

• Implementation Delays: Some projects face slow disbursement of incentives.
• Technology Gaps: Dependence on foreign technology in semiconductors and advanced components persists.
• Global Competition: Competing incentive regimes from countries like Vietnam, Mexico, and the U.S. (CHIPS Act).
• MSME Integration: Limited backward linkages in some sectors; needs stronger policy support.

Way Forward

• Faster Incentive Disbursal: Ensure time-bound approval and transparency to maintain investor confidence.
• Technology Upgradation: Encourage R&D, public–private partnerships, and technology transfer in frontier sectors.
• Cluster Development: Strengthen industrial corridors and dedicated clusters for semiconductors, EVs, and textiles.
• MSME Integration: Develop vendor development programmes linking MSMEs to anchor PLI units.
• Sustainability Focus: Incentivise green technologies, renewable energy, and circular economy models.