Notably, Indian government’s PLI scheme’s most notable success is in electronics manufacturing. The government reported a 20% value addition in mobile manufacturing within three years.
The Ministry of Commerce & Industry’s second phase of the ‘Make-in-India’ initiative is emphasising sectors like drones, toys, robotics, electric vehicle components, and electronics due to their export potential and job creation capabilities. The Department for Promotion of Industry and Internal Trade (DPIIT) is actively engaging with 24 sub-sectors to enhance manufacturing in India.
The chosen sectors, which include air-conditioners, auto components, aluminium, and other important sectors, align with Indian industries’ strengths. This will cater the need for reducing imports, export potential, and job creation.
The ministry highlighted a significant increase in foreign direct investment (FDI) in manufacturing. Over the past nine financial years (2014-23), the sector received $149 billion in FDI equity inflow, a 55% rise compared to the $96 billion during the previous nine years (2005-14). Overall, FDI inflow from FY 2014 to 2023 reached $596 billion, almost double the amount of the preceding period. This surge in FDI reflects India’s growing appeal as a global investment destination.
A key element of this growth is the Production-Linked Incentive (PLI) scheme, which has drawn investments over Rs 95,000 crore until September of the current year. The scheme resulted in production/sales worth Rs 7.80 lakh crore, created 6.4 lakh jobs, and boosted exports by Rs 3.20 lakh crore. Initially applied to three sectors, the PLI scheme now encompasses 14 sectors with a budget of Rs 1.97 lakh crore. In FY 2022-23, around Rs 2,900 crore in incentives were distributed to qualified manufacturers.
The PLI scheme’s most notable success is in electronics manufacturing. The government reported a 20% value addition in mobile manufacturing within three years. In the 2022-23 period, the total electronics production was $101 billion, with smartphones making up $44 billion, including $11.1 billion in exports. This performance underlines the PLI scheme’s effectiveness in enhancing production, job creation, and exports across various sectors. Selection of 27 companies under PLI 2.0 for IT hardware, recently, has been a boon in this regard. The selected companies include big names like HP, Lenovo, Dixon, Foxconn and Dell etc.
