PLI Schemes: 76% growth in manufacturing sector FDI, 20% value addition in mobile manufacturing in 3 yrs

Addressing a press conference in New Delhi on Tuesday, DPIIT Secretary Rajesh Kumar Singh said PLI Schemes have given a massive boost of 76% in FDI in the Manufacturing sector in FY 2021-22 (USD 21.34 billion) compared to the previous FY 2020-21 (USD 12.09 billion).

The PLI scheme is built on the foundation of 14 sectors with an incentive outlay of Rs. 1.97 lakh crore (about US$ 26 billion) to strengthen their production capabilities and help create global champions.

Sectors for which PLI schemes exist and have seen an increase in FDI inflows from FY 2021-22 to FY 2022-23 are Drugs and Pharmaceuticals (+46%), Food Processing Industries (+26%) and Medical Appliances (+91%).

PLI Schemes have transformed India’s export basket from traditional commodities to high-value-added products such as electronics and telecommunication goods, processed food products etc.

As of date, 733 applications have been approved in 14 Sectors with an expected investment of Rs.3.65 lakh crore.

A total of 176 MSMEs are among the PLI beneficiaries in sectors such as Bulk Drugs, Medical  Devices, Pharma, Telecom, White Goods, Food Processing, Textiles & Drones.

Actual investment of Rs. 62,500 crore has been realized till March 2023 which has resulted in incremental production/ sales of over Rs. 6.75 lakh crore and employment generation of around 3,25,000. Exports boosted by Rs 2.56 lakh crore till FY 2022-23.

Incentive amount of around Rs 2,900 crore disbursed in FY 2022-23 under PLI Schemes for 8 sectors viz. large-scale electronics manufacturing (LSEM), IT hardware, bulk drugs, medical devices, pharmaceuticals, telecom & networking products, food processing and drones and drone components.

PLI Scheme has led to major smartphone companies shifting their suppliers to India, e.g., Foxconn, Wistron and Pegatron.

As a result, top high-end phones are being manufactured in India.

It has also resulted in a 20-fold increase in women's employment and localization in IT hardware such as batteries and laptops.

The DPIIT Secretary said that the value addition in mobile manufacturing in India is to the tune of 20%.

“We have been able to increase the value addition in mobile manufacturing to 20% within a period of 3 years whereas countries like Vietnam achieved 18% value addition over 15 years and China achieved 49% value addition in over 25 years. Seen in this perspective, it is a big achievement,” Rajesh Kumar Singh added.

PLI Scheme for LSEM along with the existing Phased Manufacturing Program (PMP) has led to increased value addition in the electronics sector and in smartphone manufacturing, 23% and 20% respectively, from negligible in 2014-15. Of the $ 101 Billion total electronics production in FY 2022-23, smartphones constitute USD 44 Billion including $ 11.1 billion as exports.

Import substitution of 60% has been achieved in the Telecom sector and India has become almost self–reliant in Antennae, GPON (Gigabit Passive Optical Network) & CPE (Customer Premises Equipment).

Drones sector has seen a 7 times jump in turnover due to the PLI Scheme which consists of all MSME Startups.

Under the PLI Scheme for food processing, the sourcing of raw materials from India has seen a significant increase which has positively impacted the income of Indian farmers and MSMEs.

Due to the PLI Scheme, there has been a significant reduction in imports of raw materials in the Pharma sector.

Unique intermediate materials and bulk drugs are being manufactured in India including Penicillin-G, and the transfer of technology has happened in the manufacturing of Medical Devices such as (CT scan, MRI etc.).