Expand PLI scheme to labour sectors: Parliamentary committee to govt

The committee also recommended that the commerce department should 'proactively' take measures to conclude the FTAs

A parliamentary committee has recommended extending and enhancing the production-linked incentive (PLI) scheme and expanding its coverage to include labour-intensive sectors, such as chemicals, leather, apparel, and handicrafts.

 

“The committee recognises that the PLI scheme has significantly bolstered India’s manufacturing sector and export growth… Additionally, establishing a robust framework for monitoring and reporting on the scheme’s impact is essential to ensure its effectiveness,” according to the Parliamentary Standing Committee on commerce.

 

Currently, the PLI scheme covers 14 sectors, including mobile phones, drones, white goods, telecommunications, textiles, automobiles, specialty steel, and pharmaceutical drugs, with an outlay of ₹1.97 trillion. The committee has recommended extending the scheme to additional sectors, such as defence manufacturing, aerospace, and ship containers to strengthen domestic manufacturing.

 

The committee also expressed concern over the “lack of a clear timeline” for launching the National E-Commerce Policy under the Department for Promotion of Industry and Internal Trade (DPIIT). It recommended the government to expedite the policy’s finalisation and implementation with a ‘clear timeline’.

 

Focus on exports

 

The committee stressed the importance of operationalising and continuing the Interest Equalisation Scheme (IES), which provides financial support to exporters by compensating for the high cost of export credit, helping them remain competitive in international markets.

 

IES was operational until December 31 but was later merged with the ₹2,250 crore Export Promotion Mission announced in the Union Budget. However, the scheme is still not operational.

 

“The committee would have ideally preferred continuation of the scheme. However, if a new scheme (Export Promotion Mission) is being envisaged, components of IES must be duly incorporated with adequate allocation of funds,” the report said.

 

It urged the government to implement the mission at the earliest and for the commerce department to reassess funding requirements and seek additional allocations if needed.

 

The committee also recommended that the commerce department ‘proactively’ take measures to conclude ongoing free-trade agreement (FTA) negotiations for mutually beneficial trade opportunities with various countries. This would allow greater investment opportunities, increase exports, ease in labour mobility and technology transfer.

 

India is currently negotiating trade deals with the US, the UK, the European Union, and Oman, while discussions with Australia are focused on a comprehensive FTA. India plans to finalise agreements with the US, EU, and New Zealand by the end of this year.

 

“The committee notes that among the countries with which India has signed FTAs or Comprehensive Economic Partnership Agreements, some —including Australia, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, and Vietnam — export much more to India than they import. The department should take measures to target these countries with specific products/services to bridge the balance of trade gap with these countries,” it said.