PLI scheme delivers manufacturing boost as investments near ₹2 lakh crore

India’s Production Linked Incentive programme has emerged as a major driver of manufacturing expansion, investment inflows and export growth, with measurable gains across priority sectors, the government said on Thursday. Official data reviewed through September 2025 show that PLI schemes have attracted actual investments of nearly ₹2 lakh crore across 14 sectors. These investments have resulted in incremental production and sales exceeding ₹18.7 lakh crore and have created more than 12.6 lakh jobs, both direct and indirect.

The impact has been most visible in sectors central to domestic capacity building and import substitution. In the pharmaceutical and medical device sectors, the programme has helped narrow the gap between domestic demand and manufacturing capacity. Under the medical devices scheme, 21 approved projects have begun producing 54 products, including advanced equipment such as linear accelerators, MRI and CT scanners, heart valves, stents, dialysis machines, C-arms, cath labs, mammography equipment, and MRI coils. India has also strengthened its position in the global pharmaceutical market, ranking as the third-largest producer by volume. Exports now account for nearly half of total pharmaceutical output, while import dependence has reduced due to domestic production of key bulk drugs, including Penicillin G.

Electronics and telecom manufacturing have recorded equally sharp gains. Domestic mobile phone production increased from ₹18,000 crore in 2014 15 to ₹5.45 lakh crore in 2024 25, a 28-fold rise. In telecom, import substitution of around 60% has been achieved, with India becoming largely self-reliant in products such as antennas, GPON equipment, and customer-premises equipment. Several global technology firms have established manufacturing bases in India, positioning the country as a major exporter of 4G and 5G telecom equipment.

In the white goods segment, 84 companies approved under the PLI scheme for air conditioners and LED lights are expected to invest ₹10,478 crore, strengthening domestic manufacturing capacity. As of September 30, 2025, cumulative incentives of ₹23,946 crore had been disbursed under PLI schemes covering 12 sectors, including large-scale electronics, IT hardware, bulk drugs, medical devices, pharmaceuticals, telecom and networking products, food processing, white goods, drones and drone components, speciality steel, textiles, and automobiles and auto components.

On the export front, India’s merchandise exports between April and October 2025 showed resilience despite global economic pressures. Electronic goods exports grew 41.94%, driven by strong demand for smartphones and consumer electronics in markets such as the United States, the UAE and China. Agricultural exports, including rice, fruits, spices, coffee, and marine products, grew steadily, while pharmaceutical exports rose 6.46% due to increased demand from countries such as Nigeria and the US. Engineering goods, the country’s largest export category, expanded 5.35%, supported by higher shipments to Germany, the UK and South Africa.

The government said overall export performance during the fiscal year to date remained positive compared with last year, reflecting underlying resilience amid global volatility, geopolitical disruptions, and softer demand in some markets. Officials said there was no conclusive evidence linking export trends to tariff-related actions, though declines in certain commodities reflected weak global demand and price corrections. The uneven performance across sectors underscored the need for sustained export diversification, higher value addition and deeper market access.

To support exporters, especially MSMEs, the Ministry of Commerce and Industry has rolled out several measures, including market diversification efforts, improved trade infrastructure and better access to affordable trade finance. A key initiative is the Export Promotion Mission, approved by the Union Cabinet on November 12, 2025, with a budget of ₹25,060 crore over six years to address structural bottlenecks exporters face. Another major initiative, Bharat Trade Net, announced in the Union Budget 2025, aims to digitise trade documentation, improve access to export finance and integrate India’s trade ecosystem with global standards.

Programmes such as Districts as Export Hubs and E-Commerce Export Hubs are enabling MSMEs, start-ups and artisans to reach global markets at lower cost. Infrastructure upgrades under the National Logistics Policy and PM Gati Shakti are helping reduce logistics costs, while the government continues to pursue free trade agreements to expand market access. Recently, the Comprehensive Economic Partnership Agreement with the UK was signed to lower trade barriers and encourage investment.

The government said the PLI programme remains under continuous monitoring by implementing ministries and at the Empowered Group of Secretaries level. While sectors such as pharmaceuticals, large-scale electronics, medical devices and select textile segments have already shown clear gains in value addition and export competitiveness, others remain in different stages of implementation and scale-up.

Source: Economic Times