Cabinet approves PLI schemes worth US$3.06bn

The Union Cabinet, chaired by PM Modi, has approved Production Linked Incentive (PLI) schemes valued at US$3.06 billion for the manufacturing of IT hardware and pharmaceuticals, in order to establish India as a global manufacturing hub and attract further investment.

February 24, 2021

The PLI schemes will help establish India as a global manufacturing hub and attract investment.

IT hardware manufacturers can earn up to 4 per cent incentives on the sale of target segment products.

Domestic pharmaceutical manufacturers will be able to produce high value products, enhancing India’s export capabilities.

The schemes will generate up to 2,80,000 direct and indirect jobs for both sectors in the coming years.

The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved Production Linked Incentive (PLI) schemes valued at US$3.06 billion for the manufacturing of IT hardware and pharmaceuticals, with an aim to establish India as a global manufacturing hub and attract further investment. The approved PLI schemes will allow IT hardware manufacturers incentives of up to 4 per cent on the sale of target segment products, and will encourage the production of high value pharmaceutical products in the country. These incentives in both key sectors will indeed serve as a catalyst for PM Modi’s vision of Atmanirbhar Bharat, and accordingly boost India’s global export capabilities.

The Government is confident that the PLI schemes will help develop a self-sufficient electronics ecosystem in India and integrate the country in global value chains. Similarly, the schemes will enable domestic pharmaceutical manufacturers to enhance India’s position as a preferred export partner for other countries. With the third largest pharmaceutical industry in the world, India already contributes 3.5 per cent of global pharmaceutical exports to over 200 countries and is well positioned to grow further. In addition, the schemes are expected to generate an estimated 280,000 direct and indirect jobs in the coming years, which will positively impact the local availability of IT hardware and pharmaceutical products in India.

In recent years, manufacturing has emerged as a driving force for the Indian economy as the Government’s Make in India programme, supported by a range of other initiatives such as Digital India, Skill India, Startup India and more, has put the nation on the world map as the preferred destination for diverse manufacturing activities. Additionally, as part of a broader agenda, manufacturing is key to the Government’s aim of setting up a US$5 trillion economy by 2025. The Government is also targeting to have manufacturing represent 25 per cent of the national GDP while creating 100 million new jobs by 2022.