Status check of PLI schemes that aim to make India world's factory

Last year, the govt introduced a PLI scheme for mobile phones, electronic components, critical pharma drugs and medical devices, which saw huge traction among global as well as Indian manufacturers

The government has introduced a sector-specific Production Linked Incentive (PLI) scheme with the objective of import substitution, providing level playing field and incentivising domestic manufacturers. Last year, the government introduced a PLI scheme for mobile phones, electronic components, critical pharma drugs and medical devices, which saw huge traction among global as well as Indian manufacturers. Following the success, the government announced a PLI scheme for 10 additional selected sectors.  

Schemes announced to date

Large-scale Electronics Manufacturers 

(Mobile phone & specified electronic component) 

Products Covered: Phones & electronics parts

Budgetary Outlay: Rs 40,951 cr

Objective

• Production of over Rs 10.5 trn, of which around 60% expected to be exported
• Firms to bring additional investment of Rs 11,000 crore and generate more than 200,000 direct employment opportunities over 5 years along with extra indirect jobs of nearly 3 times the direct employment
• Domestic value addition expected to grow from 15-20% to 35-40% in mobile phones and 45-50% for electronics parts

Tenure: 5 years

Incentive Rates : 6-4%

Investment Threshold : 

For mobile phones: 

• Domestic firms - Rs 200 cr over 4 years 

• Foreign firms - Rs 1,000 cr over 4 years

For electronics parts: Rs 100 cr over 4 years

Status: Applicants approved for phones. A few players approved for specified  parts

NO. of Beneficiaries: 

Mobile phones – 10

Electronic components – 6

Scheme Metrics: The incentive per company will be applicable on incremental sales of manufactured goods subject to thresholds

Gestation Period: NA

Special Category for MSMEs : NA

Localisation Criterion : NA

Base Year: FY20

Whether Land & Building included : NA

Specified Electronics Component Manufacturers Round 2

Products Covered: Specified electronics parts

Outlay: Rs 2,100 cr 

Objective

• Same as the scheme for mobile phones & specified electronic components

Tenure: 4 years

Incentive Rates : 5-3%

Investment Threshold : Rs 25 cr over 4 years

Status: Second round open till March 31 this year

No. of Beneficiaries: Open to 30 applicants

Metrics: Incentive applicable on incremental sales of manufactured goods subject to thresholds

Gestation Period: NA

Special Category for MSMEs : NA

Localisation Criterion : NA

Base Year: 

For baseline revenue - FY20

For investment - FY21 

Whether Land & Building included : NA

IT Hardware Products

Products Covered: Laptops, tablets, servers, all-in-one PCs
 

Outlay: Rs 7,325 crore 

Objective

• Employment generation potential of over 180,000 (direct and indirect) over 4 years

• Expected to increase domestic value addition from 20% to 25% by 2025

Tenure: 4 years

Incentive Rates:  4-2/1%

Investment Threshold : 

Foreign firms - Rs 500 cr over 4 years

Domestic firms -  Rs 20 cr over 4 years

Status: Open for applications till March 31

No. of Beneficiaries:  Scheme open to 15 applicants (10 domestic & 5 foreign firms)

Metrics: Sops applicable on incremental sales of manufactured goods subject to thresholds

Gestation Period: NA

Special Category for MSMEs : NA

Localisation Criterion : Yes

Base Year: 

For baseline revenue - FY20

For investment - FY21  

Whether Land & Building included : NA

Telecom & Networking Products

Products Covered: Specified telecom and networking products

Outlay: Rs 12,195 cr 

Objective

• Incremental production of Rs 2.4 trn with exports of Rs 2 trn over 5 years 

• Expected to bring investment of over Rs 3,000 crore and generate huge direct and indirect employment opportunities

Tenure: 5 years

Incentive Rates :  

MSME: 7-4%

Non MSME: 6-4%

Investment Threshold : 

MSME: Minimum Rs 10 cr over 4 years

Non-MSME: Minimum Rs 100 cr over 4 years

Status: Scheme notified. Guidelines awaited

No. of Beneficiaries: Guidelines awaited

Metrics: Incentive will be applicable on incremental sales of manufactured goods subject to thresholds. Also, applicants to achieve localisation criteria

Gestation Period: NA

Special Category for MSMEs : Yes

Localisation Criterion : Guidelines awaited

Base Year: FY20  

Whether Land & Building included : NA

Medical Devices

Products Covered: Specified medical devices

Outlay: Rs 3,420 cr 

Objective

• Incremental production of Rs 68,437 crore over 5 years 

• Expected to generate extra 33,750 jobs over 5 years

Tenure: 5 years

Incentive Rate:  5%

Investment Threshold : 

NA (initially Rs 180 cr over 3 years was proposed, subsequently completely relaxed)

Status: 9 approvals provided. Remaining under review

No. of Beneficiaries: 28 applications to be approved

Metrics: The incentive per company will be applicable on incremental sales of manufactured goods subject to thresholds

Gestation Period: NA

Special Category for MSMEs: NA

Localisation Criterion: NA

Base Year: FY20  

Whether Land & Building included: NA

Pharmaceutical Drugs

Products Covered: Specified key starter molecules, drug intermediates, active pharmaceutical ingredients

Outlay: Rs 6,940 cr 

Objective

• Incremental sales of Rs 46,400 crore and significant job addition over 8 years

Tenure: 6 years

Incentive Rates:  20-5%

Investment Threshold:  NA (initially Rs 20-400 cr depending on segments was proposed, subsequently relaxed)

Status: 33 approvals provided. Rest under review

No. of Beneficiaries:  136 applicants to be approved

Metrics: Incentive will be applicable on incremental sales of manufactured goods subject to thresholds

Gestation Period: 1 year allowed (FY22)

Special Category for MSMEs: NA

Localisation Criterion: NA

Base Year: FY20  

Whether Land & Building included: Expenditure for land is not allowed; production building is considered

Pharmaceutical Drugs 2.0

Products Covered:  Specified biopharmaceuticals, complex generic drugs, patented drugs, key starter molecules, drug intermediates, active pharma ingredients

Outlay: Rs 15,000 cr 

Objective

• Production of high-value products & increasing value addition in exports

• Incremental sales of Rs 2.94 trn &  incremental exports of Rs 1.96 trn estimated from 2022-23 to 2027-28

Tenure: 6 years

Incentive Rates:  5-10% depending on the product manufactured

Investment Threshold:  Guidelines awaited

Status: Guidelines awaited

NO. of Beneficiaries: Guidelines awaited

Metrics: Incentive will be applicable on incremental sales of manufactured goods subject to thresholds

Gestation Period: 1 year allowed (FY22) 

Special Category for MSMEs: Yes

Localisation Criterion: Guidelines awaited 

Base Year: Guidelines awaited  

Whether Land & Building included: Guidelines awaited

Source: EY