Production Linked Incentive Scheme (PLI)

✦Key Features

• 14 sectors: Mobile, Electronics, Pharma, Medical Devices, Auto, ACC Battery, Textile, Food, Telecom, White Goods, Steel, Solar PV, Speciality Steel, Drones
• ₹2 lakh crore actual investment realized (Sep 2025); ₹18.7 lakh crore production; ₹7.5 lakh crore exports
• 12.6 lakh+ direct and indirect jobs; ₹28,748 crore government incentives disbursed
• India became world's 2nd largest mobile phone manufacturer — Apple, Samsung, Foxconn manufacturing in India
• PLI for Solar Panels: 40 GW capacity being set up — reducing import dependence
• PLI for Bulk Drugs (APIs): 35 products; reducing dependence on China for pharmaceuticals
• PLI for IT Hardware (laptops, tablets) from 2023 — reducing import dependence

✓Eligibility Criteria

• Companies registered in India with a manufacturing presence.
• Meeting sector-specific minimum thresholds for incremental investment and sales.
• Adherence to prescribed product and quality standards.
• Commitment to local value addition as per sector guidelines.
• Companies must be engaged in manufacturing eligible products within the identified sectors.

★Benefits

• Financial incentives leading to increased profitability and competitiveness.
• Enhanced domestic manufacturing capabilities and reduced reliance on imports.
• Significant job creation across various skill levels.
• Technological upgradation and promotion of R&D within the country.
• Increased exports and integration into global supply chains.

▶Application Process

• Submission of online application through the designated portal of the respective Ministry/Department.
• Scrutiny and evaluation of applications by an Empowered Committee.
• Approval and signing of a Memorandum of Understanding (MoU) with selected companies.
• Regular reporting on investment, production, and sales.
• Verification of performance metrics and disbursement of incentives based on achievement.

₹ Budget Allocation

197000

Funding Ratio (Centre:State): 100% Central Government (Central Sector Scheme)

Historical Context

First launched in March 2020 for three sectors (Mobile/Electronics, Pharma, Medical Devices); later expanded to 14 sectors in 2021.

Sub-Schemes

Challenges

• Low localization of supply chains for complex components
• Complexity in incentive disbursement and compliance reporting
• Global trade tensions and supply chain disruptions affecting raw material availability
• High eligibility thresholds excluding potential domestic MSMEs

Reforms & Recommendations

• Introduction of 'PLI for MSMEs' with lower investment bars
• Focus on R&D incentives rather than just production volume
• Simplification of the 'Base Year' adjustment to account for pandemic disruptions

Performance Statistics

SDG Linkages

Constitutional Backing

Technology Used

Success Stories

Key Takeaways

• Incentives of 4% to 6% on incremental sales over base year (2019-20)
• 14 sectors including High-efficiency Solar PV, ACC Batteries, and Textiles
• Aims to create 'National Champions' in manufacturing

Convergence Schemes

• PM Gati Shakti
• National Logistics Policy
• Make in India 2.0
• SPECS (for electronics)

Sector Tags