The Government of India's Production Linked Incentives (PLI) schemes are performance-linked incentives that reward companies for incremental sales of products manufactured in domestic units. The incentives aim to encourage domestic manufacturing and to reduce imports. First introduced in April 2020 for mobile phone and electronics manufacturing, the schemes later expanded to 14 sectors. The scheme is administered by the Department for Promotion of Industry and Internal Trade together with concerned line ministries. The combined approved outlay across all sectors is approximately .
The scheme has had mixed outcomes; electronics and mobile phone manufacturing has shown robust performance, increasing India's mobile phone exports from in FY 2021 to ~ in FY 2025. India was a net importer of Key Starting Materials (KSMs) and active pharmaceutical ingredients (APIs) in FY 2022, but became a net exporter in FY 2025. However, against the ambitious outlay, the government disbursed only by September 2025, and the schemes haven't met any of their announced targets. In October 2025, China complained to the WTO against the PLI schemes in several sectors, alleging that they violate WTO Agreements. The approved projects under the scheme span Andhra Pradesh, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh, and Rajasthan.
Objectives The stated aims of the PLI schemes are to attract investment in key sectors and cutting-edge technologies, increase India's manufacturing competitiveness, create employment, increase exports, promote import substitution, strengthen domestic supply chains, higher economic growth, and economic self-reliance.
Sectors Aligned with Make in India, the schemes cover 14 sectors considered 'key' by the government. These are;
Mobile manufacturing and specified electronic components Critical KSMs & APIs Medical device manufacturing Automobiles and auto components Pharmaceutical drugs Specialty steel Telecom and networking equipment Electronic and technology products White goods (air conditioners and LEDs) Food products Textile products (man-made fibre and technical textiles) High efficiency solar PV modules Advanced chemistry cell (ACC) batteries Drones and drone components
Outlays and disbursement The government of India committed an outlay of . Disbursement under different schemes totalled by September 2025 according to CareEdge Group, a Mumbai-based credit rating agency. The sectorwise outlay and tenure is given below: +#SectorOutlayTenure1Automobiles and auto components 5 years2Mobile manufacturing and specified electronic components5 years3Advanced chemistry cell batteries5 years4Pharmaceutical drugs5 years5Telecom & networking equipment5 years6Food processing6 years7Textiles (man-made fibres and technical textiles)5 years8Critical KSMs/APIs10 years9Specialty steel5 years10White goods (ACs & LEDs)5 years11Ekectronic/Technology products~4 years12High-efficiency solar PV panels5 years13Manufacturing of medical devices8 years14Drones and drone components3 years
Controversy In October 2025, China initiated a dispute at the World Trade Organization over PLI schemes for advanced chemistry cell batteries, automobile and auto components, and electric vehicles. China has alleged that the PLI schemes violate India's obligations under the Agreement on Subsidies and Countervailing Measures, as the incentives are contingent on using domestic inputs over imports and are therefore discriminatory against foreign inputs. The Indian government plans to defend the schemes vigorously.
Impact The government has claimed that the schemes across the 14 sectors led to an investment of and cumulative exports of till March 2026. Cumulative employment through March 2026 has been reported to be 8,49,069 direct jobs and 5.66 lakh indirect jobs.
Criticism and assessment Actual incentive disbursement has remained at about 12% of the initial announcements through September 2025. Initial expectations from the PLI schemes included an investment of , incremental production or sales of , and the creation of 39 lakh jobs. The target has fallen short by 31% in investments, 63.7% in job creation, and 47.5% in cumulative sales by the government's own specified metrics (in nominal terms).
See also Make in India Import substitution industrialization Autarky Economic nationalism Economy of India Regulatory burden in India References