India’s government has opted not to extend its $23 billion Production-Linked Incentive (PLI) scheme beyond its initial 14 pilot sectors, according to government officials. The program, introduced four years ago to boost domestic manufacturing, aimed to increase the sector’s share in the economy to 25% by 2025. However, as of October 2024, companies under the scheme had produced $151.93 billion worth of goods—37% of the original target—while only $1.73 billion in incentives had been disbursed.
The decision marks a shift in policy, with officials stating that alternative measures are being explored to support key industries. The PLI initiative saw significant success in the pharmaceutical and mobile phone sectors, which accounted for 94% of the nearly $620 million in incentives issued between April and October 2024. However, other industries, including steel, textiles, and solar panel manufacturing, struggled to meet targets.
Industry experts cite administrative hurdles and delays in subsidy distribution as key challenges for the program. Some companies faced non-compliance issues related to investment thresholds and growth benchmarks, leading to withheld incentives. Despite the conclusion of the PLI scheme, officials emphasize that India remains committed to strengthening its manufacturing sector through alternative support mechanisms, including investment reimbursements.
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