India Expands PLI Budget to Boost Manufacturing and Investments
India’s manufacturing sector is experiencing a major transformation, fueled by the Production Linked Incentive (PLI) Scheme. The government has increased the budget for key industries under PLI for 2025-26, reinforcing its commitment to strengthening domestic manufacturing and attracting global investments.
Significant hikes have been allocated across various sectors, with Electronics and IT Hardware receiving ₹9,000 crore, up from ₹5,777 crore in 2024-25. The Automobile and Auto Components sector has seen a substantial rise from ₹346.87 crore to ₹2,818.85 crore, while the Textile sector’s allocation has surged from ₹45 crore to ₹1,148 crore.
Launched in 2020, the PLI Scheme is designed to drive economic self-reliance and global competitiveness. The initiative provides financial incentives based on production-linked outcomes, ensuring sustainable growth in sectors like electronics, pharmaceuticals, textiles, and automobiles. With a total budget of ₹1.97 lakh crore, the scheme aims to position India as a global manufacturing hub.
Achievements and Investments
By August 2024, PLI investments reached ₹1.46 lakh crore, with expectations to exceed ₹2 lakh crore in the next year. This has already boosted production and sales, crossing ₹12.50 lakh crore, and generated approximately 9.5 lakh jobs. Export growth has also been remarkable, surpassing ₹4 lakh crore, driven by electronics, pharmaceuticals, and food processing.
The government’s investor-friendly policies, including 100% FDI under the automatic route in key industries, have played a crucial role. FDI in the manufacturing sector increased by 69% in the last decade, reaching $165 billion between 2014-2024.
Sectoral Growth Under PLI
- Electronics: India has transformed from a mobile phone importer to a net exporter, with domestic production rising from 5.8 crore units in 2014-15 to 33 crore units in 2023-24.
- Pharmaceuticals & Medical Devices: India is now the third-largest pharmaceutical producer globally, with 50% of production dedicated to exports.
- Automotive Industry: The PLI scheme has attracted over $8.15 billion (₹67,690 crore) in investments, boosting the high-tech automotive sector.
- Renewable Energy: With a $2.35 billion (₹19,500 crore) investment, the solar PV module PLI scheme is set to build 65 GW of new capacity.
- Telecom & Networking: India has achieved 60% import substitution in telecom manufacturing, turning into a major exporter of 4G and 5G equipment.
- Drones: The drone industry’s revenue has grown sevenfold under the PLI scheme, making India a rising leader in drone technology.
Conclusion
The enhanced PLI budget reaffirms India’s vision for Atmanirbhar Bharat and Make in India. By driving investments, fostering innovation, and creating jobs, the scheme is shaping India’s future as a global manufacturing powerhouse.
Source: PIB
