Production-linked incentive schemes (PLIs) were first introduced in India in March 2020 and initially targeted three sectors. Since then, the PLI concept has been extended with programs implemented in several sectors to make India self-sufficient in manufacturing products and serving domestic and international markets.
The aim of the PLI schemes is to position India as a manufacturing hub for the world by improving the domestic supply chain, developing major downstream operations, and finally incentivising investments in high-tech manufacturing. It is expected to generate economies of scale to make national manufacturing competitive through the implementation of PLI. The result is job creation, export opportunities, and reduced import dependence, especially in critical sectors and high-tech products.
It is envisioned to increase India’s total manufacturing production by over US $520 billion during the PLI policy application. The government is also working on lowering compliance burden, ease of doing business, and forming multi-modal infrastructure to reduce costs like logistics etc.
Given India's vision to become ‘Atmanirbhar’ and improve India's production capacity and exports, the Union's budget for 2021-2022 announced spending of INR 1.97 million on PLI programs for 13 key sectors over a 5-year period. PLI systems should allow the establishment of a wide range of supplier bases for the global champions established under the system. This will help increase scale and size in key industries and create as well as grow the global champions. All units together would help India create huge primary and secondary jobs.
At the time of writing this article, 14 sectors are covered under the PLI schemes. These areas include a wide range of businesses, from automobile manufacturing to pharma to telecommunication and network. The list below shows all the sectors.
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