INTRODUCTION
Production linked incentive schemes were introduced to boost domestic manufacturing and cut down import bills. One of the objectives is to make India more compliant with our World Trade Organization and also make it non-discriminatory and neutral with respect to domestic sales and exports. It was first introduced in 2020 and as of now the scheme covered a total of 14 sectors. PLI linked sectors are specific and mostly involve a careful and attentive focus on man force and creating, it can enhance building systems to adjust to climate change and even essentially reverse it in the many years to come. The 11 sectors under PLI scheme are mentioned here. To know the other sectors read the previous blog.
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4. Electronics and IT hardware
It includes products like mobile phones, specified electronic components, laptops, tablets, servers and the implementing agency for this scheme is the Ministry of Electronics and Information Technology. The budget outlay of Electronics manufacturing is INR 400 billion. The budget outlay of IT hardware is to make India a significant design and manufacturing hub in the global value chain for electronics as part of its Atmanirbhar Bharat Economic policies. A total of 14 companies have been approved under this scheme. For example, Dell International Services India Pt. Ltd, ICT Service Management Solutions (India) Pt. Ltd, Rising Stars Hi-Tech Pt. Ltd, Lava International Ltd, Dixon Technologies (India) Ltd, Info power Technologies Pt. Ltd etc.
Ministry: Ministry of Electronics and Information Technology
5. Pharmaceuticals
This scheme supports Indian pharmaceuticals to boost their manufacturing capacity and helps to include their high-value products across the global supply chain. The implementing agency is the Department of Pharmaceuticals. Two phases are PLI scheme for Key Starting Materials (KSMs)/Drug Intermediaries (DIs) and Active Pharmaceutical ingredients (APIs) (PLI 1.0) and PLI scheme for pharmaceuticals (PLI 2.0). In PLI Phase 1.0, 250 applications were received and 47 applications were approved by the Government of India with a total committed investment of INR 53.66 billion. In PLI Phase 2.0, the department of Pharmaceuticals announced the list of 55 applicants to set up manufacturing facilities with a total quantum of INR 150 billion incentive.
Ministry: Ministry of Chemicals and Fertilizers
6. Telecom and networking products
The implementing agency is Department of Telecommunications. Targeted products are core transmission equipment, 4G/5G, next generation radio access network and wireless equipment, access and customer premises equipment, internet of things access devices and other wireless equipment and enterprise equipment. Under this scheme the Department of Telecommunications found a total of 31 companies which are eligible which includes eight domestic companies and seven global companies. An outlay of INR 121.95 billion was approved.
Ministry: Ministry of Communication
7. Food Processing
The main objectives are to harness the massive employment generation potential. The two components of this scheme are to Incentivize the manufacturing of four product segments which are ready-to-cook/ready-to-eat foods, processed fruits and vegetables, mozzarella cheese and marine products. The second component is to support the branding and marketing of selected Indian food products abroad as in to enable their entry into international food markets. This will increase the visibility of Indian foods in international markets. An outlay of INR 109 billion was approved for this scheme.
Ministry: Ministry of Food Processing Industries
8. White goods
This scheme proposes a financial incentive to boost economic manufacturing and attract large investments in the value chain of white goods manufacturing. Total incentives applicable under this PLI scheme for White goods will cost the government INR 62.38 billion. White goods include Air Conditioners and LED Lights. The target segments under air conditioners are air conditioners (components high value intermediaries or low value intermediaries or sub-assemblies or a combination thereof), High value intermediaries (copper tubes, aluminium foil, and compressors) and Low value intermediaries (PCB assembly for controllers, BLDC motors, service valves, and cross flow fans for AC and other component. The target segments under LED includes LED lighting products (core components like LED chip packaging, registers, ICs, fuses, and large-scale investments in other components and Components of LED lighting products (like LED chips, LED drivers, LED engines, packaging, mechanicals, modules, wire wound inductors, and other components). Scheme outlay is INR 6,238 Cr.
Ministry: Ministry of Commerce and Industry
9. Solar Photovoltaic Modules
For the production of solar modules, total incentives for eligible investors will cost the government INR 45 billion under this PLI scheme. Some of the approved applicants under this scheme are Reliance new energy solar, Adani Infrastructure Private limited, Coal India limited, Tata Power Solar Systems Limited, Larsen and Toubro limited etc. The manufacturers are selected through a transparent competitive bidding process.
Ministry: Ministry of New and Renewable Energy
10. Automobile and auto components
With a budgetary outlay of INR 259.38 billion India’s federal government has approved the PLI scheme for automobile and auto components. This is done in order to boost domestic manufacturing capacity. Also, for increasing the production of electric and hydrogen fuel vehicles. 75 companies secured PLI approval under the Components m champion Incentive scheme on March 15,2022, and this includes Maruti Suzuki, Tata Autocomp, Mitsubishi Electric, Toyota Kirloskar etc and 20 more companies were approved in the future. The prime objective includes overcoming of cost disabilities and building a robust supply chain in areas of advanced Automotive Technology products. This scheme also aims to generate more employment opportunities.
Ministry: Ministry of Heavy Industries
11. Advanced chemical cell and batteries
The government has earmarked an outlay of INR 181 billion for this scheme. It is intended to establish a local manufacturing capacity of 50 Giga Watt Hour of ACC and 5 GWh of Niche ACC capacity. India’s objective of accelerating EV adoption over the coming decade is in sync with this scheme which also reduces the dependence on imports. Under this scheme, the main objective of the government is to achieve greater domestic value addition. The program envisages an investment which will boost domestic manufacturing.
Ministry: Ministry of Heavy Industries
12. Textiles and apparel
An outlay of INR 106.83 billion was approved and the main implementing agency is the Ministry of Textiles. The objective of the scheme is to shift textile Production from natural fibers to man-made fibers, aligning with global consumption patterns. The key priority of the government is to develop indigenous technical textiles as they have application in several sectors of the economy like infrastructure, water, hygiene, health, defence, security, aviation, automobiles etc. 61 applicants have been approved under this scheme out of 67 applications received. The import duty of cotton was reduced to zero by the government. This scheme has two parts. In the first part, the minimum Investment is INR 300 crore and the minimum turnover required to be achieved for incentive is INR 600 crore and in the second part, the minimum Investment is INR 100 crore and minimum turnover required to be achieved for incentive is INR 200 crore.
Ministry: Ministry of Textiles
13. Speciality steel
Ministry of Steel is the implementing agency of this scheme and this scheme will be implemented for a five period from FY 2022-23, with the incentive to be released from FY 2023-24. The five categories that have been selected for this PLI scheme are high strength/wear resistant steel, coated/plated steel, alloy steel products and steel wires, speciality rails and electrical steel. This scheme was introduced to enhance India’s Manufacturing Capabilities and Enhance exports. An outlay of INR 63.22 billion was approved for the implementation of this scheme.
Ministry: Ministry of Steel
14. Drones and drone components
The minimum value addition criteria have been liberalized by the government to 40 percent of net sales of drones and drone components. The budget of this scheme is INR 1.2 billion. A total incentive of INR 120 crore is spread over 3 financial years. Drones offer enormous benefits to sectors such as agriculture, emergency response, infrastructure, geospatial mapping, law enforcement and national defence. Since the rules are liberalised and with incentive schemes, the government expects the drones and drone components manufacturing industry to attract investment of over INR 5000 crore before the end of the fiscal. Also, this industry is anticipated to generate over 10000 direct jobs and over 5 lakh jobs by the end of 2024.
Ministry: Ministry of Civil Aviation
Advantages of PLI Scheme
The PLI scheme depends on the total output and this makes it a very effective scheme when compared with other grants. This scheme is easily accessible and this easy accessibility adds to the advantage list. It also supports the anchor investors capable of managing the brownfield or Greenfield projects and other investments. Another benefit of PLI is affordable product pricing. This scheme also aids its beneficiaries’ concessions on import and export duties, affordable land acquisition, Tax rebates etc.
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