India's manufacturing sector is experiencing a significant transformation, driven by strategic government initiatives aimed at enhancing global competitiveness. A key pillar of this shift is the Production Linked Incentive (PLI) Scheme, which seeks to position India as a leading manufacturing hub by fostering innovation, efficiency, and industrial growth.

The government has reinforced its commitment to domestic manufacturing by significantly increasing budget allocations for key sectors under the PLI Scheme for 2025-26. Several industries have seen substantial funding hikes, with allocations for Electronics and IT Hardware rising from Rs 57.77 billion in 2024-25 to Rs 90 billion, while Automobiles and Auto Components have received an increased allocation from Rs 3.46 billion to Rs 28.18 billion. The Textile sector has also benefited from a major boost, with funding rising from Rs 450 million to Rs 11.48 billion.

Introduced in 2020, the PLI Scheme is a performance-driven initiative designed to enhance self-reliance by offering financial incentives linked to production and incremental sales. By targeting critical industries such as electronics, textiles, pharmaceuticals, and automobiles, the scheme has successfully attracted both domestic and international investments, fostering the adoption of advanced technologies and achieving economies of scale.

With an overall budgetary outlay of Rs 1.97 trillion, the PLI Scheme encompasses 14 strategically chosen sectors to strengthen India’s manufacturing capabilities, advance technological development, and expand global market presence. The initiative aligns with the broader vision of Atmanirbhar Bharat by reinforcing domestic production and boosting exports.

As of August 2024, the PLI Schemes have facilitated actual investments of Rs 1.46 trillion, with projections indicating that this figure will exceed Rs 2 trillion within a year. These investments have already contributed to a substantial increase in production and sales, amounting to Rs 12.50 trillion, while generating approximately 9.5 lakh jobs. This employment figure is expected to rise to 12 lakh in the near future, further solidifying India’s position as a global manufacturing leader.

News source: PIB