The Indian government has announced that it will not expand its production-linked incentive (PLI) scheme during the current financial year. Instead, the Centre is planning to wait until the new central government takes office next year to decide on the enlargement of sectors that will receive incentives for domestic manufacturing. According to Rajesh Kumar Singh, the Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), the government believes that the ongoing schemes are sufficient. Although the output of the PLI schemes this year has yet to meet expectations, the performance in sales and exports has been reasonably good.
The government’s current focus is on strengthening and supporting the existing PLI schemes covering 14 sectors. However, this decision not to expand the program will be a setback to sectors such as port and shipping, heavy industries, steel, and mining, which are hoping to benefit from the PLI schemes. Specifically, the ministries of ports, shipping, and inland waterways were developing a PLI scheme for shipping-grade containers, and discussions were underway in the heavy industries ministry for an incentive scheme for grid-scale battery storage. The high-level committee has also recommended a five-year incentive scheme to promote domestic manufacturing of rich earth-moving machinery (HEMM) and underground mining equipment, primarily imported.
Although no further enlargement is planned, Singh mentioned a few modifications to the existing schemes may be made. In 2020, the government announced PLI schemes across 14 key sectors with a total outlay of 1.97 trillion rupees, aiming to enhance manufacturing capabilities in the country.
