India’s PLI schemes drive Atmanirbhar Bharat vision with Rs1.97 lakh crore boost

In a stride towards achieving self-reliance under the ‘Atmanirbhar Bharat’ vision, India’s Product-Linked Incentive (PLI) schemes have emerged as a transformative force in enhancing the nation’s manufacturing and export capabilities with an outlay of Rs1.97 lakh crore (over US$26 billion).

According to the Ministry of Commerce and Industry, the initiative, launched in November 2020, covers 14 key sectors and has already delivered milestones. The program has catalyzed investments worth Rs1.46 lakh crore (USD 17.5 billion), spurred production and sales of Rs12.50 lakh crore (US$150 billion), and boosted exports to Rs4 lakh crore (USD 48 billion).

Furthermore, it has created direct and indirect employment for 9.5 lakh individuals. As of FY 2023-24, Rs9,721 crore in incentives have been disbursed, reflecting the scheme’s tangible impact.

The PLI scheme has significantly expanded India’s manufacturing footprint, spanning 14 vital sectors such as Mobile Manufacturing, Pharmaceuticals, Automobiles, Specialty Steel, Telecom, and Advanced Chemistry Cell (ACC) Batteries.

Over 1,300 manufacturing units have been established across 27 states and union territories under the oversight of 10 Ministries and Departments. This widespread decentralization has fueled industrial growth in diverse regions, making it a nationwide success.

A noteworthy aspect of the PLI scheme is its cascading effect on the Micro, Small, and Medium Enterprises (MSME) ecosystem.

The establishment of anchor units in various sectors has created a demand for a robust supplier base, with many ancillary manufacturing units being developed in the MSME sector. This linkage is expected to fortify the entire value chain and boost MSME growth.

The PLI scheme for White Goods (air conditioners and LED lights) stands out as a key success story. With an approved outlay of Rs6,238 crore for FY 2021-22 to FY 2028-29, the initiative has already achieved 47% of its committed investment target of Rs6,962 crore and generated 100% of the envisaged direct employment, employing 48,000 individuals as of September 2024.

The domestic value addition in this sector is projected to rise significantly from 20-25% to 75-80% by the scheme’s conclusion. Encouraged by the robust industry response, the third round of applications for this segment attracted 38 new applicants with potential investments of Rs4,121 crore.

The 14 focus sectors under the PLI scheme include Mobile Manufacturing and Electronic Components, Pharmaceuticals and Medical Devices, Automobiles and Auto Components, Advanced Chemistry Cell Batteries, High-Efficiency Solar PV Modules, and Drones and Drone Components, among others.