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About Production Linked Incentive (PLI) Schemes

Hon'ble Finance Minister, Smt Nirmala Sitharaman has announced an outlay of INR 1.97 Lakh Crores for the Production Linked Incentive (PLI) Schemes across 14 key sectors, to create national manufacturing champions and to create 60 lakh new jobs, and an additional production of 30 lakh crore during next 5 years. In addition to the three schemes announced earlier in March 2020, GoI has further introduced the following 10 new PLI schemes in November 2020:

    March 2020

    • Key Starting Materials (KSMs)/Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs): Department of Pharmaceuticals
    • Large Scale Electronics Manufacturing: Ministry of Electronics and Information Technology
    • Manufacturing of Medical Devices: Department of Pharmaceuticals

    November 2020:

    • Electronic/Technology Products: Ministry of Electronics and Information Technology
    • Pharmaceuticals drugs: Department of Pharmaceuticals
    • Telecom & Networking Products: Department of Telecommunications
    • Food Products: Ministry of Food Processing Industries
    • White Goods (ACs & LED): Department for Promotion of Industry and Internal Trade
    • High-Efficiency Solar PV Modules: Ministry of New and Renewable Energy
    • Automobiles & Auto Components: Department of Heavy Industry
    • Advance Chemistry Cell (ACC) Battery: Department of Heavy Industry
    • Textile Products: MMF segment and technical textiles: Ministry of Textiles
    • Specialty Steel: Ministry of Steel

    September 2021

    • Drones and Drone Components: Ministry of Civil Aviation

    As on June 2023, 733 applications have been approved in 14 Sectors with expected investment of INR 3.65 Lakh Cr. 176 MSMEs are among the PLI beneficiaries in sectors such as Bulk Drugs, Medical  Devices, Pharma, Telecom, White Goods, Food Processing, Textiles & Drones.

    Production Linked Incentives (PLI)

    1
    Auto Components
    The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi announced the Production-Linked Incentive (PLI) Scheme in the Automobile and Auto Components sectors. The PLI scheme (outlay of $3.5 Bn) for the automobile sector proposes financial incentives of up to 18% to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain. Incentives are applicable for determined sales of products manufactured in India from April 1, 2022, for a period of five consecutive years.

    The Ministry of Heavy Industries has announced the extension of the tenure of the Production Linked Incentive (PLI) Scheme for Automobile and Auto Components by one year with partial amendments. Under the amended scheme, the incentive will be applicable for a total of five consecutive financial years, starting from the financial year 2023-24. The disbursement of the incentive will take place in the following financial year 2024-25. The scheme also specifies that an approved applicant will be eligible for benefits for five consecutive financial years, but not beyond the financial year ending on March 31, 2028.

    Recent Developments:
    1) Total of 115 companies had filed their application under this scheme. Out of which 85 applicants have been approved under this PLI scheme - 18 applicants for Champion OEM Incentive scheme and 67 applicants have been approved under Component Champion Incentive scheme.
    2) The scheme has been successful in attracting proposed investment of INR 67,690 Cr against the target estimate of investment INR 42,500 crore over a period of five years.
    3) Apart from Indian business groups, approved applicants for Champion OEM Incentive scheme include groups from countries such as Republic of Korea, USA, Japan, France, Italy, UK and Netherlands.
    Auto Components

    INR 25,938 Cr

    Scheme Outlay

    Auto components
    2
    Automobile
    Automobile

    INR 25,938 Cr

    Scheme Outlay

    Ministry

    AUTOMOBILE
    3
    Aviation
    The Central Government under the leadership of Hon’ble Prime Minister Shri Narendra Modi, has approved the PLI scheme for drones and drone components. The PLI scheme comes as a follow-through of the liberalized Drone Rules, 2021 released by the Central Government on 25 August 2021. The PLI scheme and new drone rules are intended to catalyze super-normal growth in the upcoming drone sector. The total incentive of INR 120 crores and the total PLI per manufacturer is capped at INR 30 crores.

    The scheme has multiple features to help the industry as It is nearly double the combined turnover of all domestic drone manufacturers in FY 2020-21. For this scheme, the PLI rate is 20% of the value addition which is one of the highest among PLI schemes. With the implementation of the liberalised drone rules, Production-Linked Incentive (PLI) scheme and the drone import policy, it is estimated that the annual sales turnover of the Indian drone manufacturing industry may grow from approximately INR 60 crore in 2020-21 to approximately INR 900 crore by 2024-25.

    The PLI rate is kept constant at 20% for all three years, which is an exceptional treatment for the drone industry in the country. The Minimum value addition norm has been at 40% of net sales for drones and drone components instead of 50% which is another exceptional treatment for the industry.

    A provisional list of 23 PLI beneficiaries was released on 6th July 2022.

    The beneficiaries include 12 drone manufacturers and 11 drone component manufacturers.
    outlay

    INR 120 Cr

    Scheme Outlay

    Drone
    4
    Chemicals
    The Union Cabinet on 12 May, 2021 approved a Production Linked Incentive (PLI) Scheme for setting up manufacturing facilities for Advance Chemistry Cell (ACC), Battery Storage in India, with a total manufacturing capacity of 50 Giga Watt Hour (GWh) for 5 years. The Scheme aims to enhance India’s Manufacturing Capabilities and Exports — for manufacture of Advance Chemistry Cell (ACC) in India and envisages incentivizing large domestic and international players in establishing a competitive ACC battery set-up in the country.

    Under the PLI Scheme for ACC, the production-linked subsidy is based on applicable subsidy per KWh and percentage of value addition achieved on actual sale for manufacturers who set up production units with a capacity of at least 5 GWh up to a maximum of 20GWh.

    Ministry of Heavy Industries, on 22nd October 2021 has released Request for Proposal (RFP) inviting bids from domestic and international players for setting up manufacturing facilities for Advance Chemistry Cell (ACC) Battery Storage in India under the ACC Production Linked Incentive (PLI) Scheme. In response to the EoI, total 10 domestic/international manufacturers submitted their proposal for ~130 GWh as per technical bids opened on 15.01.2022.
    Scheme Outlay

    INR 18,100 Cr

    Scheme Outlay

    Ministry

    ACC battery cell
    5
    Electronic Systems
    The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Schemes for Large Scale Electronics Manufacturing and IT Hardware for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Aatmanirbhar Bharat.
    For enhancing India’s manufacturing capabilities and exports, the PLIs for Large Scale Electronics Manufacturing and IT Hardware have been launched. This will ensure the creation of globally competitive Mobile Phones, IT Hardware products and components. This will cater to rise in global demand while supporting the creation of a robust electronics & components ecosystem in the country.
    Scheme Outlay

    INR 38,645 Cr

    PLI for Large Scale Electronics Manufacturing

    Scheme Outlay

    INR 17,000 Cr

    PLI for IT Hardware

    ESDM
    6
    Food Processing
    The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in Food Products for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat. Under the PLI Scheme for Food Processing Industry, a total of 158 applications have been approved under different categories including 22 applicants (out of 30 selected applicants) selected to participate under PLI Scheme for Millet-based products are MSMEs. The implementation of PLI scheme is likely to facilitate expansion of food processing capacity by nearly INR 30,000 crore and create additional direct and indirect employment opportunities for about 2.5 lakh persons by the year 2026-27. As per the data being reported by the PLIS beneficiaries, investment of about INR 7,099 Crores has been made under the Scheme.
    Food product

    INR 10,900 Cr

    Scheme Outlay

    Food products
    7
    Medical Devices
    The government has launched the Production Linked Incentive (PLI) Scheme to boost domestic manufacturing in the medical devices sector. Under the PLI scheme for Medical Devices, till now, a total of 26 projects have been approved, with a committed investment of INR 1206 Cr (~$147 mn) to enable growth and innovation in the MedTech industry and make India as the global hub for manufacturing and innovation in the coming years.

    Outlay

    INR 3420 Cr

    Schemes Outlay

    Medical Devices
    8
    Metals & Mining
    The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in Specialty Steel for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat. The last date of application was 15th September 2022.

    The Ministry of Steel has signed 57 MoUs with 27 companies which is expected to generate an investment of ~INR 30,000 Crores with an additional capacity creation of about 25 MT of specialty steel in the next 5 years.
    icon

    INR 6,322 Cr

    Scheme outlay

    Steel PLI
    9
    Pharmaceuticals
    The Indian pharmaceuticals market is supported by the following Production Linked Incentive Schemes to boost domestic manufacturing capacity, including high-value products across the global supply chain.


    1. PLI Scheme for Key Starting Materials (KSMs)/Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) (PLI 1.0) - Under the PLI scheme for Bulk Drugs, the objective is to boost domestic production of 41 select critical bulk drugs in the country. 51 projects have been selected for the 34 notified bulk drugs. Out of this, 22 projects have been commissioned till 31st January 2023. An investment of INR 2019 crores have been reported while employing 1900 persons in the same period.


    2. Production-Linked Incentive (PLI) Scheme for Pharmaceuticals d (PLI 2.0) - Under the PLI scheme for Pharmaceuticals, 55 applicants have been selected, including 20 Micro, Small & Medium Enterprises (MSMEs). As of 31st January 2023, sales of about INR 36,000 cr have been reported by the select applicants. The scheme has garnered an investment of INR 16,199 crores by these applicants in the first year of implementation while employing 23,000 persons in the same period.
    PLI in Pharmaceuticals

    Scheme Outlay INR 6,940 Cr

    PLI for Bulk Drugs

    PLI Scheme for Pharmaceuticals Manufacturing

    Scheme Outlay INR 15,000 Cr

    PLI Scheme for Pharmaceuticals Manufacturing

    PLI in Pharmaceuticals
    10
    Renewable Energy
    The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in High Efficiency Solar PV Modules for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Aatmanirbhar Bharat.

    1. The national programme on ‘high-efficiency solar PV modules’:
    Tranche 1: INR 4500 cr (US$ 550 Mn)
    Tranche 2: INR 19,500 cr (US$ 2.37 Bn). The second phase, launched on 21st September 2022, is expected to build 65 GW of annual manufacturing capacity.

    2. National Green Hydrogen Mission with an outlay of INR 19,744 Cr (US$ 2.4 Bn) targets 5 MMT annual green hydrogen/ ammonia production by 2030. Investors can place their bids till 7th September 2023 to seek incentives.

    The scheme focuses on Direct employment of about 30,000 and Indirect employment of about 1,20,000 persons; Import substitution of around INR 17,500 Cr every year, and Impetus to Research & Development to achieve higher efficiency in solar PV modules.
    icon

    INR 24,000 cr

    Scheme Outlay

    Solar module
    11
    Telecom
    The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi had given its approval to introduce the Production-Linked Incentive (PLI) Scheme in Telecom & Networking Products sector for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat. In June 2022, the Department of Telecommunications (DoT) amended the guidelines for PLI Scheme to introduce Design-led Manufacturing Scheme as part of the PLI Scheme with additional incentives worth more than INR $533.33 Mn.

    Applications closed on 20th July 2022.

    Achievements:
    • Total 31 applicants have been approved under the Scheme, out of which 16 are MSME, 8 Non- MSME (Domestic) and 7 Non-MSME (Global). These companies are expected to invest $450 Mn, generate 40,000 jobs and incremental production of over $24.4 Bn throughout the tenure of the PLI Scheme.
    • INR 1330 Cr investments has been generated till February 2023.
    Scheme Outlay

    INR 12,195 Cr

    Scheme Outlay

    Telecommunication
    12
    Textiles & Apparel
    Government has launched the Production Linked Incentive (PLI) Scheme with an approved outlay of INR 10,683 crore to promote production of MMF Apparel, MMF Fabrics and Products of Technical Textiles in the country to enable Textiles Industry to achieve size and scale and to become competitive.

    Achievements:
    • Centre approves 64 applications under the Production Linked Incentive scheme for Textiles.
    • In the approved 64 applications, the proposed total investment is INR19,798 crore and projected turnover of INR 1,93,926 crore with a proposed employment of 2,45,362.
    • A total of 12 companies have proposed to set-up projects under the said Scheme in Madhya Pradesh, 7 companies in Uttar Pradesh and 4 companies in Rajasthan.
    icon

    INR 10,683 Cr

    Scheme Outlay

    Textiles

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