India Mulls Tweaking PLI Scheme, Five Sectors Including Pharma And Solar To Benefit

The Government is contemplating the relaxation and expansion of certain norms for five sectors, to optimise its $24 billion industrial incentives designed to bolster local manufacturing.

The 1.97-trillion rupees production-linked incentive scheme (PLI), initiated in 2020, encompasses 14 sectors, from electronic products to drones, but it has seen notable success only in a few of them, prompting a reassessment.

As per a report by The Economic Times, the proposed changes are intended for the textiles, pharmaceuticals, drones, solar, and food processing industries, collectively representing almost one-third of the PLI scheme.

In the textiles sector, the government intends to include more products like man-made fibers and extend the timeline for firms to meet the manufacturing targets required for claiming incentives.

The pharmaceuticals sector will see a one-year extension, and the allocation for incentive payouts in the drone production will increase from Rs 1.2 billion to Rs 3.3 billion.

For the food processing sector, the scheme will be extended to include millet-based products, and in the solar module sector, the production of ingots and wafers will be incorporated into the scheme.

The Ministry of Commerce and Industry, responsible for the scheme's implementation, is in discussions with other federal departments regarding these changes.

While specific details are yet to be made public, the adjustments will not require additional financial allocation but will be funded from the scheme's savings.

Notable companies such as Hindustan Unilever Ltd, ITC Ltd, Nestle India Ltd, Britannia Industries Ltd, Reliance Industries, JSW Energy, and Tata Power are part of the incentive schemes for food processing and solar module manufacturing.

A portion of the PLI incentives remains unclaimed, leading the government to explore options for utilising the unused funds, including the possibility of including new sectors in the scheme.