PRODUCTION LINKED INCENTIVE SCHEME

Introduction
 

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:

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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

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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

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Production Linked Incentives (PLI) Schemes for:

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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 scheme was closed on 9th January 2022.

Total 95 applicants have been approved under this PLI scheme: 20 under Champion OEM and 75 under Component champion.

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Automobile -

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 scheme was closed on 9th January 2022.

Total 95 applicants have been approved under this PLI scheme: 20 under Champion OEM and 75 under Component champion.

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Aviation -

The Central Government under the leadership of Hon’ble Prime Minister Shri Narendra Modi, has approved the Production-Linked Incentive (PLI) scheme for dronesand drone components. The PLI scheme comes as a follow-through of the liberalised Drone Rules, 2021 released by the Central Government on 25 August 2021. The PLI scheme and new drone rules are intended to catalyse super-normal growth in the upcoming drone sector.
Last date for submitting the application form is 20th May 2022

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Chemicals -

Launched and approved in 2021 at a budgetary layout of INR 18100 Crore over a 5-year period. Under the scheme, the government seeks to boost local manufacturing of advanced chemistry cell to bring down prices of battery in the country, which will reduce the cost of electric vehicles as well. The scheme was designed to be technology-agnostic. The beneficiary firm were free to choose suitable advanced technology, machinery, raw materials and other intermediate goods for setting up cell manufacturing facility to cater for any application. This scheme was oversubscribed by 2.6 times (130 gwh). After final evaluation, a total of 4 companies were selected for incentives under Production Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC) Battery Storage. This includes Reliance New Energy Solar Limited (5GWh Awarded and 15 GWh waitlisted); Ola Electric Mobility Private Limited (20 GWh awarded); Hyundai Global Motors Company Limited (20 GWh awarded) and Rajesh Exports Limited (5GWh awarded).

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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 – Atmanirbhar Bharat.

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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 the MoFPI has approved 56 companies in Category-I, 13 companies in Category-II and 80* companies in Category-III.
*20 applications are common in category I and III out of above 149 applications approved.

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Medical Devices -

The Indian Government has identified medical devices as a priority sector for the flagship 'Make in India' program and is committed to strengthening the manufacturing ecosystem. The Production Linked Incentive Scheme (PLI) Promoting Domestic Manufacturing of Medical Devices and Production Linked Incentive Scheme for Pharmaceuticals (PLI 2.0) have been introduced to provide an impetus to India’s vision of becoming a global manufacturing hub for medical devices.

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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.
Application deadline has been extended to 31st May 2022.

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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)
2. Production-Linked Incentive (PLI) Scheme for Pharmaceuticals d (PLI 2.0)

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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 – Atmanirbhar Bharat.

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Telecom -

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has 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.

The PLI scheme is expected to attract large investments from global players and help domestic companies seize the emerging opportunities and become big players in the export market.
For more information: https://www.investindia.gov.in/pli-scheme-for-telecom

 

Textiles & Apparel -

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in Textiles Products for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat.

1. A total of 61 applicants have been approved under Production Linked Incentive (PLI) Scheme For Textiles out of 67 applications received.
2. Government reduces import duty of cotton to zero.
3. The scheme has two parts, Part 1 where minimum investment is INR 300 crore and minimum turnover required to be achieved for incentive is INR 600 crore; and Part-2, where minimum investment is of INR 100 crore and minimum turnover required to be achieved for incentive is INR 200 crore.

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White Goods -

The Production Linked Incentive Scheme for White Goods (PLIWG) proposes a financial incentive to boost domestic manufacturing and attract large investments in the White Goods manufacturing value chain. Its prime objectives include removing sectoral disabilities, creating economies of scale, enhancing exports, creating a robust component ecosystem and employment generation.

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