Building a manufacturing engine through PLI

IN MARCH 2020, the Narendra Modi government unveiled the Production-Linked Incentive (PLI) scheme to give manufacturing a fresh push. Six years later, PLI has become the cornerstone of India’s era of policy reforms where enhanced production is incentivised. “The [PLI] scheme has so far attracted ₹2.5 lakh crore in actual investments, generated ₹22 lakh crore in production and sales, contributed ₹15 lakh crore in exports and created more than 14 lakh jobs,” PM Modi said. PLI has become a key driver of India’s manufacturing prowess and job creation. The high-efficiency solar PV modules category, which attracted ₹64,873 crore cumulatively until March 2026, tops the sector-wise investment list. It is followed by pharma and drugs at ₹45,158 crore, and automobiles and auto components a tad behind at ₹44,326 crore. But the table-toppers in job creation are the food sector. It created 329,000 jobs, followed by large-scale electronics manufacturing at 169,000.The scheme proved to be a major fillip to exports with almost a four-fold jump in value to ₹15.2 lakh crore, as of March 31, 2026, over two years, the government states. Krishnamurthy V. Subramanian, former chief economic advisor, put it in perspective. “Every ₹1 of PLI incentive has mobilised ₹6.8 of actual investment, ₹64.1 of production/sales and ₹42.9 of exports,” he stated in a post on X. The government notes that mobile phone production rose by around 2.4 times since the scheme’s launch, while imports have declined by 77%. Nearly 99.2% of mobile phones used in India are now made domestically, the government data says. Similarly, the pharma sector saw cumulative sales of over ₹3.64 lakh crore. “In the bulk drugs sector, manufacturing capacity of about 55,000 MT has been established across 26 critical APIs, significantly reducing imports of paracetamol, levofloxacin and norfloxacin,” the government notes. In telecom, the scheme has supported the development of “indigenous 4G technology and domestic manufacturing capability for 5G telecom equipment”. In the white goods segment, compressor manufacturing capacity has increased from one million units in 2021 to 10 million units in 2025-26. The scheme’s success in pharma and electronics can largely be attributed to their focus on the Indian market, development of the complete value chain, and creation of a supporting ecosystem, rather than concentrating on individual products alone, says Sohrab Bararia, partner and leader, incentives advisory, Grant Thornton Bharat. “The availability of complementary and ancillary schemes in these sectors has further strengthened the overall ecosystem, enabling higher domestic value addition, reducing import dependence and improving competitiveness.” This value-chain- and ecosystem-based approach should be replicated across other PLI sectors such as textiles, automobiles and auto components, solar PV, white goods, specialty steel, and food processing, he adds. “PLI interventions should be complemented by targeted support for components, raw materials, intermediate products, technology, R&D, and ancillary industries, along with infrastructure and skilling initiatives. It would create stronger multiplier effects, deepen domestic value addition, build manufacturing capabilities and enhance India’s position in global value chains.”

Building a manufacturing engine through PLI

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