India approves Rs 1,45,980 crore under Production Linked Scheme (PLI). Will that prove game changer in India's manuring capabilities ?

The production linked Incentive (PLI) scheme that would give benefits to the tune of Rs 1,45,980 crore to 10 key sectors is going to prove a game-changer for enhancing India’s manufacturing capabilities and for enhancing exports. The five-year financial outlay of the scheme was cleared by Modi Cabinet on November 11.

The scheme was first announced on April 1, 2020, offers a production linked incentive to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units. The Scheme has been designed to boost the electronics manufacturing landscape and establish India at the global level in the electronics sector. 

 The scheme extends an incentive of 4% to 6% on incremental sales (over a base year) of goods manufactured in India and covered under target segments, to eligible companies, for a period of five (5) years subsequent to the base year as defined. 

 The Scheme was open for applications for a period of 4 months initially and was extended subsequently. It would be implemented through a Nodal Agency that would act as a Project Management Agency (PMA) and would be responsible for providing secretarial, managerial and implementation support.

As per the financial outlay, the highest allocation is given to the automobile sector of Rs 57,042 crore, Rs 18,100 crore for advance chemical battery cells, Rs 15,000 crore for pharmaceutical drugs and Rs 12,195 crore for telecom and network products.

The PLI scheme across these 10 key specific sectors would make Indian manufacturers globally competitive, attract investment in the areas of core competency. The cutting-edge technology would ensure efficiencies, create economies of scale and make India an integral part of the global supply chain.

S.NO	Sectors	Implementing Ministry/Department	Approved financial outlay over a five-year period Rs. crore
	Advanced Chemistry Cell (ACC) Battery	NITI Aayog and Department of Heavy Industries	18100
	Electronic/Technology Products	Ministry of Electronics and Information Technology	5000
	Automobiles & Auto Components	Department of Heavy Industries	57042
	Pharmaceuticals drugs	Department of Pharmaceuticals	15000
	Telecom & Networking Products	Department of Telecom	12195
	Textile Products: MMF segment and technical textiles	Ministry of Textiles	10683
	Food Products	Ministry of Food Processing Industries	10900
	High-Efficiency Solar PV Modules	Ministry of New and Renewable Energy	4500
	White Goods (ACs & LED)	Department for Promotion of Industry and Internal Trade	6238
	Speciality Steel	Ministry of Steel	6322
Total			145980

• ACC battery manufacturing represents one of the largest economic opportunities of the twenty-first century for several global growth sectors, such as consumer electronics, electric vehicles, and renewable energy. The PLI scheme for ACC battery will incentivize large domestic and international players in establishing a competitive ACC battery set-up in the country.
• India is expected to have a USD 1 trillion digital economy by 2025. Additionally, the Government's push for data localization, Internet of Things market in India, projects such as Smart City and Digital India are expected to increase the demand for electronic products. The PLI scheme will boost the production of electronic products in India.
• The automotive industry is a major economic contributor in India. The PLI scheme will make the Indian automotive Industry more competitive and will enhance the globalization of the Indian automotive sector.
• The Indian pharmaceutical industry is the third-largest in the world by volume and 14th largest in terms of value. It contributes 3.5% of the total drugs and medicines exported globally. India possesses the complete ecosystem for development and manufacturing of pharmaceuticals and a robust ecosystem of allied industries. The PLI scheme will incentivize the global and domestic players to engage in high-value production.
• Telecom equipment forms a critical and strategic element of building a secured telecom infrastructure and India aspires to become a major original equipment manufacturer of telecom and networking products. The PLI scheme is expected to attract large investments from global players and help domestic companies seize emerging opportunities and become big players in the export market.
• The Indian textile industry is one of the largest in the world and has a share of ~5% of global exports in textiles and apparel. But India's share in the manmade fibre (MMF) segment is low in contrast to the global consumption pattern, which is majorly in this segment. The PLI scheme will attract large investment in the sector to further boost domestic manufacturing, especially in the MMF segment and technical textiles.
• The growth of the processed food industry leads to a better price for farmers and reduces high levels of wastage. Specific product lines having high growth potential and capabilities to generate medium- to large-scale employment have been identified for providing support through PLI scheme.
• 
  Large imports of solar PV panels pose risks in supply-chain resilience and have strategic security challenges considering the electronic (hackable) nature of the value chain. A focused PLI scheme for solar PV modules will incentivize domestic and global players to build large-scale solar PV capacity in India and help India leapfrog in capturing the global value chains for solar PV manufacturing.
• White goods (air conditioners and LEDs) have a very high potential for domestic value addition and making these products globally competitive. A PLI scheme for the sector will lead to more domestic manufacturing, generation of jobs and increased exports.
• Steel is a strategically important industry and India is the world's second-largest steel producer in the world. It is a net exporter of finished steel and has the potential to become a champion in certain grades of steel. A PLI scheme in Specialty Steel will help in enhancing manufacturing capabilities for value-added steel leading to an increase in total exports.

Sector Wise Product Lines

Sector		Product Lines
Advance Chemistry Cell (ACC) Battery Manufacturing		ACC Batteries
Electronic/Technology Products		Semiconductor Fab Display Fab Laptop/ Notebooks Servers IoT Devices Specified Computer Hardware
Automobile and Auto Components		Automobile and Auto Components
Pharmaceuticals	Category 1 Biopharmaceuticals Complex generic drugs Patented drugs or drugs nearing patent expiry Cell based or gene therapy products Orphan drugs Special empty capsules ·        vii. Complex excipients
	Category 2 Active Pharma Ingredients (APIs) /Key Starting Materials (KSMs) and /Drug Intermediaries (Dls) Category 3 Repurposed Drugs Auto-immune drugs, Anti-cancer drugs, Antidiabetic drugs, Anti Infective drugs, Cardiovascular drugs, Psychotropic drugs and Anti-Retroviral drugs In-vitro Diagnostic Devices (IVDs) Phytopharmaceuticals Other drugs not manufactured in India Other drugs as approved
Telecom Products	Core Transmission Equipment 4G/5G, Next Generation Radio Access Network and Wireless Equipment Access & Customer Premises Equipment (CPE), Internet of Things (IoT) Access Devices and Other WirelessEquipment Enterprise equipment: Switches, Router
Textiles	Man-Made Fiber Segment Technical Textiles
Food Processing	Ready to Eat / Ready to Cook (RTE/ RTC) Marine Products Fruits & Vegetables Honey Desi Ghee Mozzarella Cheese Organic eggs and poultry meat
Solar PV manufacturing	Solar PVs
White Goods	Air conditioners LED
Steel Products	Coated Steel High Strength Steel Steel Rails Ally Steel Bars & Rods

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