NEW DELHI: The extension of the production-linked incentive (PLI) scheme to ten sectors, including automobiles, textiles, steel and telecom, could go a long way providing a filip to manufacturing, exports, forex earnings, and employment, representatives of India Inc said on Wednesday. While the exact details are still awaited, the total outlay approved for the scheme stands at nearly Rs 2 lakh crore.
"The new PLI policy is transformational and timely and will facilitate India becoming a global manufacturing hub. The policy is strategically targeted and will boost production, make Indian goods competitive and expand exports as part of global value chains," said Confederation of Indian Industry President Uday Kotak.
The auto components and automobile sector, for instance, will receive the maximum share of Rs 57,042 crore. Industry executives say that this is likely to translate into more investments from existing domestic and foreign manufacturers.
It also comes at a time when OEMs across the world are planning to relocate parts of their supply chain network out of China and reduce reliance on Chinese units. "I believe this is an orbit shifting initiative. Will bring investment, get scale, create jobs and make Indian manufacturing globally competitive," said Mahindra and Mahindra MD Pawan Goenka.
The scheme also allocates Rs 12,000 crore towards incentivising local manufacturing of telecom and network equipment. Officials in the Department of Telecom say that the government wants to make sure that critical network infrastructure, especially for 5G, is manufactured in India. "We are preparing guidelines for the scheme and they will be released soon," said an official.
The inclusion of white goods and IT products is also aimed at reducing import dependence and providing a level playing field to the domestic sector. For instance, India still imports 20-25 per cent of air-conditioners sold locally and 80 per cent of the main component - compressors - is imported.
"The scheme will help in unlocking manufacturing, opening up to exports to further scale up demand and fusing supply chains into backward integration," said Panasonic India & South Asia CEO Manish Sharma.