India’s industrial policies are increasingly emphasizing Production-Linked Incentive (PLI) schemes as a central tool to drive manufacturing growth, attract investments, and enhance global competitiveness. These policies are part of a broader strategy to position India as a key manufacturing hub across various sectors such as electronics, pharmaceuticals, automobiles, textiles, and renewable energy. The PLI schemes offer financial incentives to companies based on their incremental production and sales, encouraging firms to scale up operations, improve technology adoption, and boost exports.

Introduced initially in 2020, the PLI programs have been expanded to cover a wide range of industries with a total outlay of billions of dollars over several years. The goal is to create economies of scale, develop global champions from India, and reduce dependence on imports, especially in critical sectors. By rewarding production growth and value addition, the schemes aim to deepen India’s manufacturing ecosystem, generate employment opportunities, and strengthen supply chain resilience.

Companies both domestic and international have shown strong interest in these incentives, with sectors like electronics manufacturing services (EMS), pharmaceutical ingredients, and solar equipment witnessing significant investment commitments. The government’s focus is not only on traditional industries but also on emerging areas like electric vehicles, advanced chemical cells, and semiconductor manufacturing, ensuring that India is well-prepared for future industrial demands. The emphasis on production-linked incentives represents a major shift towards performance-based support in industrial policy, aimed at sustaining high growth rates and building a more self-reliant and globally competitive economy.