Impact Assessment of PLI Schemes

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1 Impact Assessment of PLI Schemes
November 2026
IMPACT ASSESSMENT OF
PLI SCHEMES

Disclaimer
NITI Aayog collaborated with its knowledge partner IIM Ahmedabad in the preparation of
this report. While due care has been exercised to prepare the report using the data from
Ministries/Departments, NITI Aayog does not confirm the authenticity of data and accuracy of
the methodology to prepare the report. All data cited, including that from Central Ministries/
Departments have been interpreted solely by our knowledge partner.
While due care has also been exercised to ensure the accuracy of the analysis and arguments
supported by existing literature, the possibility of alternate interpretations cannot be ruled out.
NITI Aayog shall not be held responsible for the findings or opinions expressed in the document.

i Impact Assessment of PLI Schemes
Impact Assessment of
PLI
SCHEMES

ii

iii
Table of Contents
Message from Hon’ble Vice Chairman, NITI Aayog vii
Message from CEO, NITI Aayog viii
Message from Programme Director (Industry & Foreign Investment), NITI Aayog ix
Message from Professor, IIM Ahmedabad xi
Acknowledgement xiii
Executive Summary 1
Introduction 5
Analysis of the Impact of the PLI Schemes across 14 Sectors 14
1. PLI Scheme on Large Scale Electronics Manufacturing 15
2. PLI Scheme on Bulk Drugs 20
3. PLI Scheme on Medical Devices 28
4. PLI Scheme on Pharmaceuticals Drugs 32
5. PLI Scheme on IT Hardware 38
6. PLI Scheme on Telecom & Networking Products 43
7. PLI Scheme on Automobile & Auto Components 49
8. PLI Scheme on ACC Batteries 56
9. PLI Scheme on Drones & Drone Components 60
10. PLI Scheme on Textiles 64
11. PLI Scheme on White Goods (ACs & LED Lights) 70
12. PLI Scheme on Solar PV 76
13. PLI Scheme on Food Products 81
14. PLI Scheme for Speciality Steel 90
Conclusion and Way Forward 94
1. Conclusion and Way Forward 95
Appendix 99
A. Large Scale Electronics Manufacturing LSEM 101
B. Bulk Drugs 107
C. Pharmaceuticals Drugs 114
D. MEITY: IT Hardware 2.0 122
E. Telecom & Networking Products 123
F. Drone and Drone Components 132
G. Textiles 133
H. Food Processing Industries 137
I. Speciality Steel 150

iv
List of Figure
Graph A1 101 Graph A2 101
Graph A3 102 Graph A4 102
Graph A5 103 Graph A6 103
Graph A7 104 Graph A8 104
Graph A9 105 Graph A10 105
Graph A11 106 Graph A12 106
Graph B1 107 Graph B2 107
Graph B3 108 Graph B4 108
Graph B5 109 Graph B6 109
Graph B7 110 Graph B8 110
Graph B9 111 Graph B10 111
Graph B11 112 Graph B12 112
Graph B13 113 Graph B14 113
Graph C1 114 Graph C2 114
Graph C3 115 Graph C4 115
Graph C5 116 Graph C6 116
Graph C7 117 Graph C8 117
Graph C9 118 Graph C10 118
Graph C11 119 Graph C12 119
Graph C13 120 Graph C14 120
Graph C15 121 Graph C16 121
Graph D1 122 Graph E1 123
Graph E2 123 Graph E3 124
Graph E4 124 Graph E5 125
Graph E6 125 Table 5.7 126
Graph E7 126 Table 5.8 126
Graph E8 127 Table 5.9 127
Graph E9 128 Table 5.10 128
Graph E10 129 Table 5.11 129
Graph E11 129 Table 5.12 130
Graph E12 130 Table 5.13 130
Graph E13 131 Graph F1 132
Graph G1 133 Graph G2 133
Graph G3 134 Graph G4 134
Graph G5 135 Graph G6 135
Graph G7 136 Graph H1 137
Graph H2 137 Graph H3 138
Graph H4 138 Graph H5 139

v
List of Tables
Table 1: Financial Outlay under the PLI Scheme across 14 Sectors 5
Table 2: Evaluation of Impact of PLI Scheme 11
Table 3: Total Disbursement under the PLI Scheme across 14 Schemes 12
Table 4: Sector Wise PLI Indicators Performance till March 2026 13
Table 5: Year on year exchange rate of ₹ with US$ 100
Graph H6 139 Graph H7 140
Graph H8 140 Graph H9 141
Graph H10 141 Graph H11 142
Graph H12 142 Graph H13 143
Graph H14 143 Graph H15 144
Graph H16 144 Graph H17 145
Graph H18 145 Graph H19 146
Graph H20 146 Graph H21 147
Graph H22 147 Graph H23 148
Graph H24 148 Graph H25 149
Graph H26 149 Graph I1 150
Graph I2 150 Graph I3 151

vi

vii
Manufacturing has long been recognised as an engine
of employment, innovation and productivity-led growth.
A vibrant manufacturing sector generates employment
across skill levels, deepens domestic value chains, encourages innovation and strengthens a
country’s integration with global production networks. Its multiplier effects extend well beyond
the factory floor, supporting logistics, infrastructure, services and skill development. For
India, as it advances towards the vision of Viksit Bharat @2047, strengthening manufacturing
capabilities will be central to sustaining high, inclusive and broad-based growth.
This imperative has acquired renewed urgency at a time when global supply chains are
undergoing significant structural realignment. As firms and nations seek to diversify
their production networks, build resilience and reduce concentration risks, India has a
distinct opportunity to emerge as a trusted and preferred destination for investment-led
manufacturing. Realising this opportunity, however, will require strengthening domestic
capabilities in sectors of strategic importance and enabling Indian industry to move up the
value chain, from assembly towards deeper domestic value addition, advanced technologies
and globally competitive production.
It is with this objective that the Government of India introduced the Production Linked
Incentive scheme. Spanning fourteen sectors of strategic and economic importance,
the scheme seeks to attract investment in areas of core competency and advanced
technology, enhance manufacturing efficiency and economies of scale, and improve the
global competitiveness of Indian industry. In its design, the scheme reflects the role of an
enabling State, one that seeks to build productive capabilities, encourage investment and
innovation, and reward performance, rather than relying on protection alone. It represents
a significant and forward-looking commitment to placing manufacturing at the heart of
India’s growth and development trajectory.
I am glad that NITI Aayog, in collaboration with its knowledge partner, the Indian Institute
of Management Ahmedabad, has undertaken this impact assessment of the PLI Schemes. A
policy intervention of this scale and ambition deserves careful and independent evaluation,
and this report offers a candid and balanced account of the encouraging progress achieved
so far, while also pointing to the areas that will require sustained attention as the scheme
matures.
I commend the team for this valuable effort. I am confident that this report will serve as
a useful reference for policymakers, industry and researchers alike, and that it will help
strengthen the design and delivery of the PLI Schemes in the years ahead. Sustaining the
momentum of these initial years will be essential to building lasting industrial strength,
thereby reinforcing India’s position as a globally competitive manufacturing hub and
contributing to the realisation of Viksit Bharat @2047.
Dr. Ashok Kumar Lahiri
Vice Chairman, NITI Aayog
Message from the
Vice Chairman

viii
India’s ambition to emerge as a Global Manufacturing Hub
is central to its journey towards becoming a Viksit Bharat.
A competitive manufacturing sector can drive economic growth, generate employment,
strengthen domestic capabilities and enhance India’s participation in Global Value Chains
(GVCs). Deeper integration into GVCs can facilitate access to new markets, strengthen
domestic suppliers, expand exports and reduce import dependence in critical areas. Real
manufacturing GVA increased from ₹34.82 lakh crore in FY 2022–23 to ₹47.47 lakh crore
in FY 2025–26, registering a CAGR of 10.88% and cumulative growth of 36.3% over the
period. Sustaining this momentum is essential for strengthening India’s manufacturing
sector.
The Production Linked Incentive (PLI) Scheme is a key policy intervention to strengthen
domestic manufacturing, attract investment and enhance export competitiveness. Covering
14 strategic sectors, the scheme provides financial incentives to eligible companies on
incremental sales of goods manufactured in India. It seeks to expand production capacity,
generate employment, promote exports, strengthen domestic capabilities and develop
supplier ecosystems. Its coverage spans labour-intensive industries, critical value chains
and sunrise sectors, with public support targeted at areas with significant growth potential
and global competitiveness. The time-bound sunset clause encourages sustainable
competitiveness and removes long-term dependence on government support.
NITI Aayog’s study, “Impact Assessment of PLI Schemes”, evaluates the performance of
the 14 schemes at the mid-course stage, assessing outcomes, identifying implementation
challenges and drawing lessons from their experience. The assessment examines sectoral
performance across investment, production, exports and employment, while seeking to
distinguish scheme-led outcomes from underlying industry trends. For sectors where
schemes remain in the gestation period or reliable data are unavailable, the report refrains
from drawing definitive conclusions. It also recognises the importance of complementary
enabling conditions, including infrastructure, logistics, the business environment and state-
level facilitation.
I hope that this report will provide policymakers, industry stakeholders and researchers
with a comprehensive, evidence-based understanding of the performance, achievements
and limitations of the PLI schemes. By highlighting evolving outcomes, implementation
challenges and the need for complementary policy measures, it seeks to identify areas
requiring further attention, course correction or targeted interventions. The findings are
expected to contribute to the strengthening of existing schemes, improve the design
and implementation of future manufacturing policies, ensure efficient utilisation of public
resources, generate sustainable economic benefits, enhance India’s global competitiveness
and deepen its integration into GVCs.
Message from the
CEO
Anurag Jain
CEO, NITI Aayog

ix
Global manufacturing has evolved into a highly interconnected and technology-driven
ecosystem, shaped by global value chains, digitalization, and shifting geopolitical
dynamics. Countries are increasingly focusing on resilience, diversification, and
sustainability in their manufacturing strategies, moving beyond cost competitiveness to
innovation-led growth. In this context, India is emerging as a significant manufacturing
hub, leveraging its large domestic market, demographic dividend, and improving
infrastructure. India’s manufacturing output as on 2024 was USD 490 billion. With a
2.91% share of global manufacturing output, India ranks as the fifth-largest manufacturing
economy in the world, after China, United States, Japan, and Germany.
To keep pace in the present era of global competitiveness, it is imperative for India
to boost its manufacturing and create a conducive atmosphere for the manufacturing
sector to thrive. This necessitates that companies manufacturing in India must become
an integral part of global supply chains. To fulfil one’s stated objectives and to achieve
India’s vision of becoming global manufacturing hub, Government of India has introduced
Production Linked Incentive (PLI) Scheme.
The objective of the scheme is to bring size and scale in India’s manufacturing and
make it an integral part of global value chains. The scheme is designed to do this within
a defined period as the scheme has a sunset clause. The total outlay of the scheme is
Rs.1.97 Lakh crore and is expected to catalyse additional production of over USD 500
billion.
The Government of India through PLI conceptualized and brought forward a scheme
which is outcome-oriented, growth driven and focusses on enhanced production. The
scheme is structured in such a way that it identifies the potential areas/sectors of growth,
visualizes the prospective production targets and investments, and provides incentives
only after these enhanced production targets are achieved. The scheme encourages the
companies to perform and achieve the desired targets so, the growth of the sector is
automatically ensured.
PLI is an innovative concept in policy-making of the Government where scheme with
financial outlays is expected to be result-oriented and incentives are dispersed only when
the committed targets are achieved. Scheme of this characteristic is being implemented
for the first time and has invited great interest from domestic as well as foreign investors.
Message from the
Programme Director
Ishtiyaque Ahmed
Programme Director – Industry and
Foreign Investment, NITI Aayog

x
The scheme structure eliminates any possibility of wastage of funds as incentives are
released only after the production target has been achieved and sales are recorded. This
scheme has been built on the foundation of strengths of the sectors, their production
capabilities and their drive to become global champions. Additionally, to boost nation-
wide infrastructure delivery, the Government has come up with PM Gati Shakti-National
Master Plan for Multimodal Connectivity, to further facilitate India’s manufacturing sector
in the long run and also provide impetus to PLI schemes.
NITI Aayog in partnership with IIM Ahmedabad has undertaken a research study on
impact assessment of PLI Schemes, to evaluate the impact of PLI scheme on key
parameters such as investment, additional production, exports, import substitution
generation. Further, this study also aims to develop scenarios to understand the long-
term impact of PLI schemes across 14 sectors.
This report evaluates the impact of the PLI scheme on key parameters across capital and
labour-intensive sectors. It also presents the comparative analysis of India’s performance
due to the PLI scheme with the global benchmarks, suggest measures for augmenting
the success of the existing PLI schemes and also analyse the Impact of PLI schemes on
attracting FDI and participation in global value chains.
As we move towards the vision of a developed India, or Viksit Bharat, manufacturing
and exports will play the central role. By aligning policy, industry, and innovation, we can
ensure that India not only participates in global trade - but helps shape its future.

xi
The Production Linked Incentive (PLI) scheme launched by the Government of India stands
apart from earlier schemes intended for import substitution or export promotion in its
potential to stimulate the creation of global-scale capacities, which, in turn, may increase the
cost-competitiveness of Indian manufacturers. However, a firm’s ability to scale, especially
in an ever-changing geopolitical environment, is fraught with significant risks. A stable
policy environment, exemplified by the PLI scheme, can spur corporates to invest in newer
technologies at a global scale and drive employment generation, import substitution, and
export promotion objectives.
The objective of this report is to figure out whether or not the scheme is progressing towards
its goals and to what extent. This should also provide some ideas about how schemes of
similar nature should look in future. Our analysis suggests that, across many sectors, PLI has
had a significant positive impact on several parameters. Further, across other sectors, there is
sufficient evidence to believe that PLI is likely to have a positive impact in the near future. This
is because while in some sectors the technology is easily adaptable to scale, in other sectors
the nature of technology is such that even a minimal impact becomes discernible only after
a long gestation period.
The key parameters we examined are overall production, investment, import substitution,
export promotion, and overall employment generation-the key parameters connected to
Vision 2047 of the Government of India. The PLI scheme is still a work in progress and needs
continued support. Directionally, the scheme is starting to bear fruit; however, in terms of
quantitative impact, progress remains varied across sectors and is not yet out of the woods.
Investment offtake shows some progress, but the impact on production, employment, import
substitution, and exports may be too early to fully evaluate, given the lagging nature of these
parameters and the gestation periods involved.
Our review also highlighted that data collection regarding additional revenue and employment
needs needs to be standardised across ministries. This may require clarification on what firms
need to report, when, and how the data can be communicated periodically so that the health
of the PLI scheme can be more easily tracked.
Finally, we believe that schemes of similar nature in the future should not rely solely on supply-
side interventions like the existing PLI scheme, but also incorporate demand-side incentives
for downstream firms and consumers to purchase from PLI firms. A balance between push
and pull mechanisms may herald the next evolution of the PLI scheme.
Overall, PLI is a good initiative by the Government, and is likely to help the Indian industry
become more globally competitive in the near future.
Prof. Vishwanath Pingali..
Message from the
Prof. IIM Ahmedabad
Prof. Saral Mukherjee.

xiiImpact Assessment of PLI Schemes

xiii Impact Assessment of PLI Schemes
Acknowledgement
Production Linked Incentive (PLI) schemes have been introduced across 14 sectors to realise
India’s vision of becoming a global manufacturing hub. The schemes aim to enhance scale and
competitiveness in selected sectors and provide a strong impetus to domestic manufacturing.
This report presents a sector-wise assessment of the impact of PLI schemes, which have been
instrumental in reshaping India’s manufacturing trajectory.
The Report on Impact Assessment of PLI Schemes is the result of a collective effort. I am
grateful to the Hon’ble Vice Chairman, NITI Aayog, for his leadership and guidance. I also extend
my sincere thanks to Shri Anurag Jain, CEO, NITI Aayog, for his valuable suggestions in the
preparation of this report. The insights and guidance provided by the leadership from time to
time have been invaluable in bringing this report to fruition.
I would like to thank all the implementing Ministries and Departments of the PLI schemes for
their cooperation in sharing the latest data and providing valuable inputs, which have been duly
incorporated in the report.
IIM Ahmedabad has been our knowledge partner for this project. Prof. Viswanath Pingali and
Prof. Saral Mukherjee, supported by Ms. Oindrila Banerjee, have undertaken extensive analysis
of beneficiary-level data across the PLI schemes. Each sector has been examined in depth, and
its specific nuances have been clearly articulated in this report. I sincerely acknowledge their
contribution.
Finally, this endeavour would not have been possible without the dedicated efforts of the team
from the Industry & Foreign Investment Division. I would like to acknowledge the contributions
of Shri Upendra Kumar Gupta, Deputy Adviser; Shri Abhishek Mukherjee, Research Officer and
Ms. Pragya Bajpai, Young Professional.
Ishtiyaque Ahmed
Programme Director
NITI Aayog, GOI

1Impact Assessment of PLI Schemes
Executive Summary
The Production Linked Incentive (PLI) Scheme is a major policy initiative of the Government
of India aimed at strengthening domestic manufacturing, attracting investment, creating
employment, promoting exports and building globally competitive production capabilities. By
linking incentives to incremental production and performance, the scheme seeks to address
specific constraints relating to scale, technology, investment and competitiveness, while
encouraging firms to expand manufacturing capacity and integrate more deeply into global
value chains. This report assesses the implementation and emerging impact of the PLI Scheme
across the 14 sectors under its ambit, with a focus on four key outcomes: investment, production,
employment and exports.
The assessment indicates that the PLI Scheme is beginning to generate meaningful additionality
across several sectors, although the extent and nature of the impact vary considerably depending
on the maturity of the sector, the technological complexity of the products and the gestation
period of investments. Sectors such as large-scale electronics manufacturing, Pharmaceuticals
Drugs, food processing, drones, medical devices and white goods show relatively strong
evidence of progress across multiple parameters. Other sectors, including automobiles and
auto components, telecom and Speciality steel, demonstrate encouraging progress, particularly
in investment and production, but require further strengthening in areas such as employment,
exports and domestic value addition. In relatively newer or more capital-intensive sectors such
as ACC batteries and advanced electronic components, outcomes remain at an early stage,
with substantial investments still in the capacity-creation and commissioning phase. The sector-
wise findings therefore need to be interpreted in the context of the differing implementation
timelines and investment-to-production cycles of individual schemes.
Large Scale Electronics Manufacturing (LSEM) with an outlay of
₹34,193 crore has emerged as
one of the strongest performers, particularly in mobile manufacturing, with significant growth in
production, sales, exports and employment across both domestic and global firms. The scheme
has successfully expanded production, attracted investment, and generated employment, while
also laying the foundation for the recently launched Electronics Component Manufacturing
Scheme (ECMS) with an outlay of
₹40,000 crore. Overall, the LSEM scheme shows strong
progress, particularly in mobile manufacturing.
The Pharma Bulk Drugs scheme with an outlay of
₹6,940 Crore presents a more differentiated
picture across its four target segments. Target Segment IV – Other Chemical Synthesis Based
KSMs/Drug Intermediates/APIs has been the strongest and most consistent performer, while
Target Segment I has recorded a relatively late but sharp production scale-up and Target
Segment II has shown gradual growth from a low base. In contrast, Target Segment III – Key
Chemical Synthesis Based KSMs/Drug Intermediates has experienced vulnerability across
indicators. A sharp increase in investment during FY 2024–25 nevertheless indicates renewed
industry confidence. Overall, the scheme has generated additional growth, but with significant
variation across segments.
The Medical Devices PLI scheme, with an outlay of
₹3,420 crore, has generated ₹1,151 crore in
investment,
₹14,945 crore in sales and 5,268 jobs by March 2026. Investment has consistently
exceeded targets, indicating a strong industry response and additional capital formation.

2 Impact Assessment of PLI Schemes
Production has also improved beyond the underlying trend, while employment has shown gradual
improvement and recently surpassed targets. However, relatively low incentive disbursement
and limited information on export trends indicate that the scheme remains in an evolving phase
and warrants continued monitoring.
The Pharmaceuticals Drugs PLI scheme with an outlay of
₹15000 crore demonstrates broadly
positive outcomes across all four parameters. Large firms have recorded the strongest
performance, supported by scale and integration with global markets, while mid-sized firms
have shown steady improvement. MSMEs have experienced more uneven outcomes, particularly
in exports, reflecting constraints relating to scale and market access. Importantly, investment
has consistently exceeded targets, while production and employment have recorded significant
growth, indicating a positive overall industrial impact from the scheme.
The IT Hardware scheme, with an outlay of
₹17,000 crore, remains at a relatively early stage.
As of March 2026, only four firms had received incentives, although most approved firms had
commenced operations. Production initially declined during the transition from the earlier
scheme and the associated gestation period, but improved during 2024–25 as participation
increased. Investment and employment have shown moderate growth, while the export impact
remains difficult to establish because of limited data. The scheme therefore shows gradual
progress, with its longer-term impact still emerging.
The Telecom and Networking Products PLI scheme, with an outlay of
₹12,195 crore, has supported
growth in production, investment, exports and employment across large domestic firms,
global firms and MSMEs. Sales and exports have generally increased, following a temporary
slowdown in 2023 and a strong recovery in 2024–25. Employment has broadly followed the
production cycle, while investment has remained strong despite some recent moderation. The
principal challenge remains high import dependence for high-value components, with domestic
manufacturing still concentrated substantially in final assembly. Deeper domestic value addition
and stronger component capabilities will therefore be important for sustaining the scheme’s
long-term impact.
The Automobile and Auto Components PLI scheme, with an outlay of
₹25,938 crore, has
generated substantial investment, with
₹44,326 crore invested by March 2026. Production of
electric vehicles has increased significantly across segments, supported by greater localisation
and Domestic Value Addition certification. Rising incentive disbursements also indicate
increasing industry participation and are generating positive spillover effects across the broader
ecosystem, encouraging greater participation across the value chain, strengthening linkages
among industry players, and supporting the development of a more integrated manufacturing
ecosystem. While the scheme has demonstrated strong results in investment and production,
employment remains below target and export outcomes cannot yet be assessed comprehensively
owing to limited data.
The Advanced Chemistry Cell (ACC) Battery scheme, with an outlay of
₹18,100 crore, is intended
to establish 50 GWh of domestic ACC capacity and 5 GWh of niche battery capacity. Progress,
however, remains at an early stage, with only 1.4 GWh of capacity developed so far and no
commercial production or incentive disbursement yet. Most participating firms remain engaged
in infrastructure and capacity creation. Key constraints include limited domestic technological
capabilities, dependence on foreign expertise, the absence of a sufficiently developed upstream

3Impact Assessment of PLI Schemes
ecosystem for key materials, reliance on imported machinery, project execution delays and
shortages of skilled manpower.
The Drones and Drone Components scheme, with an outlay of only
₹120 crore, has demonstrated
strong early momentum. By the period covered in the assessment, 77.5% of the allocated funds
had been disbursed, with most approved firms receiving incentives. Turnover and investment
have increased consistently, indicating expanding production capacity and strengthening
industry confidence. Although limited employment and export data restrict a complete
assessment, the available evidence points to additional investment and production growth and
supports the scheme’s role in developing an emerging strategic manufacturing sector.
The Textiles PLI scheme, with an outlay of
₹10,683 crore, is focused on MMF apparel, fabrics and
technical textiles and seeks to build large-scale, globally competitive manufacturing capacity.
By March 2026, the scheme had generated
₹8,117 crore in investment, ₹11,241 crore in sales and
33,427 jobs. Since implementation began only in 2022–23, the assessment remains constrained
by the relatively short implementation period and incomplete reporting. Investment improved
significantly in 2024–25 and initial evidence indicates rising sales and exports among reporting
firms, but investment remains below aggregate targets and employment trends remain
inconclusive. Accordingly, while the scheme shows emerging signs of progress, it is premature
to establish significant additionality in production and employment.
The White Goods PLI scheme, with an outlay of
₹6,238 crore and participation from 80 firms,
has demonstrated strong operational progress. By March 2026, cumulative investment had
reached
₹6,409 crore, production ₹43,150 crore, and employment more than 52,703 jobs. Firms
have consistently exceeded threshold investment and sales requirements, while domestic value
addition increased substantially from 20% to 55%, reflecting progress in localisation of critical
components and technology transfer through global partnerships. Although export outcomes
cannot yet be assessed, the scheme has clearly contributed to the development of a more
competitive and self-reliant domestic white goods ecosystem.
The High Efficiency Solar PV Modules PLI scheme, with an outlay of
₹24,000 crore, has
contributed to a significant expansion of India’s domestic solar manufacturing capacity and
local value addition. Manufacturing capacity increased from 8 GW to nearly 116 GW, of this,
approximately 24 GW about 20.7% is directly attributable to PLI-supported projects, indicating
the scheme’s substantial contribution to capacity augmentation. While imports declined and
exports increased, indicating improving domestic competitiveness. At the same time, the sector
remains exposed to global market conditions, including falling module prices associated with
Chinese overcapacity, supply-chain constraints relating to critical materials and uncertainty
arising from emerging alternative energy technologies.
The Food Processing Industries PLI Scheme (PLISFPI) with an outlay of
₹10900 crore has
generated encouraging outcomes across investment, production, exports and employment,
with investment exceeding
₹9,207 crore by March 2026. The strongest gains have been
recorded among larger firms, particularly in ready-to-eat foods and processed fruits and
vegetables. Category 2 MSMEs have shown more uneven performance, reflecting structural
constraints. Millet-based products have also recorded encouraging growth. Overall, the scheme
has delivered positive outcomes, although strengthened MSME participation and sustaining
international competitiveness remain important areas for further attention.

4 Impact Assessment of PLI Schemes
The Speciality Steel PLI scheme, with an outlay of ₹6,322 crore, has attracted substantial
investment and is intended to increase domestic production of high-quality steel, reduce import
dependence and improve export competitiveness. By March 2026, the scheme had generated
₹23,896 crore in investment, sales of 2,774 thousand tonnes and 14,138 jobs. The scheme remains
at an early stage, with only one firm having received incentives despite wider participation.
Reporting firms have recorded increasing production, suggesting improving capacity utilisation,
while declining investment indicates a shift from capital expenditure towards operations.
However, limited employment and export data constrain a comprehensive assessment. The
available evidence points to additional investment and some employment gains, while evidence
of production beyond the expected trend remains limited at this stage.
A cross-sector assessment highlights an important feature of the PLI framework: the schemes
are not uniform in either their objectives or their implementation trajectory. In some sectors,
the immediate priority is to establish domestic capacity and reduce import dependence; in
others, the emphasis is on achieving scale, increasing exports and securing a position in global
value chains. Similarly, capital-intensive sectors may generate substantial investment without
a proportionate increase in employment, while technology-intensive sectors may require a
longer gestation period before production and export outcomes become visible. These sectoral
differences are important when evaluating the effectiveness of a common policy instrument.
The assessment also identifies certain issues that merit continued policy attention. Investment
and capacity creation often precede production by several years, particularly in capital – and
technology-intensive industries. In addition, the incentive may not always be sufficiently large
relative to the scale of investment required to materially alter firm-level investment decisions.
The use of nominal values also requires caution, as increases in the value of production or sales
may not necessarily represent equivalent increases in physical output. Further, higher investment
does not automatically translate into proportionate employment generation, particularly in
sectors where automation and capital intensity are high. These considerations suggest that
PLI outcomes should be assessed using a combination of value, volume, capacity, productivity,
employment, exports and domestic value-addition indicators, wherever data permits.
Overall, the evidence suggests that the PLI Scheme is on track in achieving several of its
intended objectives, while the full impact remains to emerge in a number of sectors. Several
schemes have already demonstrated additional investment and production, while others have
established the foundations for future scale and competitiveness. With a substantial portion of
the implementation period still remaining, continued monitoring, timely resolution of sector-
specific bottlenecks and close engagement with industry will be important. Going forward,
the experience of PLI can also inform the design of future targeted industrial interventions,
particularly in identifying sectors where policy support can catalyse investment, build scale,
strengthen domestic value chains and enable Indian firms to compete more effectively in global
markets.

5Impact Assessment of PLI Schemes
Introduction
Manufacturing occupies a pivotal position in India’s development journey because its impact
extends well beyond the factory floor. A stronger manufacturing base can simultaneously raise
productivity, generate productive employment, deepen domestic value addition, stimulate
investment and exports, and create powerful linkages with agriculture and services. It also
generates a multiplier effect by fostering innovation, technology adoption, logistics and other
service ecosystems, thereby contributing to broad-based economic gains. For a country with
a large and relatively young workforce, expanding manufacturing is particularly important for
converting demographic potential into productive economic opportunity. Manufacturing is,
therefore, central to India’s aspiration of sustaining high growth over the coming decades.
India’s manufacturing sector is gaining increasing importance in the country’s growth trajectory,
with its contribution to real economic activity strengthening steadily. Manufacturing’s share in GVA
at constant prices increased from Rs.34.82 lakh crore in 2022–23 to Rs.47.47 lakh crore in 2025-26.
The compounded annual growth rate of manufacturing GVA at constant prices during 2022–23
to 2025–26 is 10.88%. This progress builds on India’s established capabilities across automobiles,
pharmaceuticals, chemicals, steel, electronics, textiles, engineering goods and defence, while
creating significant opportunities to deepen domestic value addition, expand production scale,
enhance productivity and technology adoption, and strengthen integration into global value chains.
Sustaining this momentum will be critical to expanding manufacturing’s contribution to investment,
employment, exports, technological advancement and India’s long-term economic growth.
International economic experience suggests that manufacturing, particularly when combined
with export orientation, has played an important role in enabling economies to move from low –
to high-income status. The Production Linked Incentive (PLI) Scheme draws on this experience,
with the objective of building globally competitive manufacturing capabilities in India. Rather
than providing broad-based or untargeted support, the scheme seeks to incentivise firms that
demonstrate the potential to invest, adopt advanced technologies, expand production and
achieve scale. By linking incentives to incremental production and performance, PLI is designed
to catalyse investment and enhance competitiveness while enabling firms to progressively
operate at greater scale and efficiency. Its significance, therefore, lies not simply in supporting
additional production, but in creating the conditions for firms to build capabilities, integrate
more deeply into GVCs and compete in international markets. In this sense, PLI represents a
targeted instrument for addressing specific capability and scale constraints that can otherwise
impede India’s entry into strategically important manufacturing segments. Sector wise financial
outlays under different PLI schemes is as follows:
Table 1: Financial Outlay under the PLI Scheme across 14 Sectors
Sl.
No.
Sectors Actual Financial Outlay (` Crore)
1 Large Scale Electronics Manufacturing 34193
2
Critical Key Starting materials/Drug Intermediaries
and Active Pharmaceutical Ingredients (Bulk Drugs)
6940
3 Manufacturing of Medical Devices 3420

6 Impact Assessment of PLI Schemes
Sl.
No.
Sectors Actual Financial Outlay (` Crore)
4 Pharmaceuticals drugs 15000
5 Electronic/Technology Products (IT Hardware 2.0) 17000
6 Telecom & Networking Products 12195
7 Automobiles & Auto Components 25938
8 Advanced Chemistry Cell (ACC) Battery 18100
9 Drones & Drone Components 120
10
Textile Products: MMF segment and technical
textiles
10683
11White Goods (ACs & LED) 6238
12High Efficiency Solar PV Modules 24000
13Food Products 10900
14Speciality Steel 6322
GRAND TOTAL 191049
The PLI architecture is deliberately selective and largely product-specific, reflecting the
recognition that manufacturing competitiveness cannot be built through a uniform policy
across all sectors. The scheme covers three broad strategic segments: labour-intensive sectors,
which have significant potential for employment generation; value-chain sectors, where building
domestic capabilities can deepen value addition and strengthen India’s integration into global
production networks; and sunrise sectors, where technological change and emerging global
demand create opportunities for India to establish early competitive positions. The selection of
a limited number of sectors allows public support to be concentrated where the potential for
investment, scale, employment, technological capability and global value-chain integration is
particularly significant.
As of March 2026, cumulatively the scheme has attracted investments of
₹2,40,138 crore,
generated production worth
₹22,66,412 crore, created employment for 8,49,069 individuals,
and disbursed
₹35,354 crore in incentives. The sector-wise assessment indicates that nearly 70%
of the targeted segments are broadly on track, with particularly strong outcomes emerging in
electronics, telecom and pharmaceuticals drugs. At the same time, the pace of outcomes varies
across sectors, reflecting differences in the maturity of the schemes, investment cycles and
sectoral characteristics. These aggregate outcomes provide the broader context for examining
the financial architecture of the PLI framework and the extent to which the allocated resources
have translated into actual disbursements.
The overall outcomes need to be considered alongside the financial architecture of the PLI
framework. The 14 PLI schemes have a combined financial outlay of
₹1,91,049 crore, against
which cumulative disbursements stood at
₹35,354 crore as of March 2026, representing 18.51%
of the total outlay. The relatively modest share of cumulative disbursement is consistent with
the performance-linked design of the scheme, under which incentives are released only upon

7Impact Assessment of PLI Schemes
achievement of specified investment, production and other eligibility criteria, rather than being
front-loaded. As participating firms expand capacity, scale up production and meet progressively
higher performance thresholds, disbursements are expected to increase over the respective
scheme tenures. The sector-wise financial outlay is presented in Table 1.
While the aggregate disbursement provides an overview of the financial utilisation of the PLI
portfolio, the year-wise disbursement profile provides a more meaningful indication of the pace
of implementation. It captures how actual disbursements have evolved against the planned
amounts as the schemes have progressed through their respective implementation cycles.
The year-wise profile indicates a clear improvement in the pace of disbursement over time.
Against a planned disbursement of
15,401 crore up to FY 2023–24, actual disbursement stood
at
₹9,721 crore, or 63% of the planned amount. This increased to ₹10,114 crore against a plan of
₹
14,277 crore in Fy 2024–25, representing 71% achievement. In FY 2025–26, actual disbursement
reached
₹15,519 crore against a planned ₹15,472 crore, achieving 100% of the annual target.
The acceleration is consistent with the performance-linked structure of PLI: as participating
projects mature, manufacturing capacity becomes operational and production expands beyond
the base-year levels, eligible incremental sales and corresponding incentive claims increase.
The year-wise trajectory therefore indicates that the schemes are progressing in line with their
performance-linked implementation framework, although the pace naturally varies across
sectors depending on their respective maturity and investment cycles.
The financial and implementation profile of the schemes needs to be viewed in the context of
the broader objectives for which the PLI framework was designed. Across sectors, the schemes
seek to achieve three interrelated objectives: attracting investment in strategically important and
technology-intensive sectors; promoting efficiency, scale and economies of scale in domestic
manufacturing; and enabling Indian companies to become globally competitive and expand
their presence in international markets and global value chains. These objectives provide the
common framework against which the performance of individual sectors is assessed in the
subsequent sections.
While these objectives provide a common framework, their relative emphasis differs across
sectors in accordance with their stage of development, competitive position and strategic
requirements. In textiles, large-scale electronics manufacturing (LSEM) and food processing,
for instance, export expansion and deeper integration into GVCs are important objectives,
given India’s potential in labour-intensive and tradable segments. In sectors such as Speciality
steel, telecom and networking products, white goods, advanced chemistry cell batteries and
drones, the immediate priority also includes strengthening domestic capabilities in areas
where production remains relatively limited and domestic demand has historically been
met substantially through imports. In these sectors, PLI can help create the initial scale and
ecosystem required to make domestic production commercially viable, after which greater
scale, productivity and technological capability can support a transition towards stronger export
competitiveness. The objective, therefore, is not limited to import substitution; the creation
of domestic scale and capabilities can provide the foundation for subsequently improving
productivity, competitiveness and export performance.
The development of these manufacturing ecosystems also has important implications for MSMEs,
even though the PLI schemes are primarily designed to support investment and scale in selected
manufacturing sectors rather than to function as dedicated MSME schemes. As anchor firms

8 Impact Assessment of PLI Schemes
expand production, they create demand for components, intermediate goods, logistics and
specialised services, providing opportunities for MSMEs to participate as suppliers and become
integrated into multi-tier manufacturing networks. This spillover can facilitate technology diffusion,
market access and the emergence of new supplier ecosystems around manufacturing clusters. At
the same time, MSMEs continue to face constraints relating to technology upgradation, access to
finance, market access and skilling. The experience of PLI could therefore provide useful lessons
for designing complementary interventions aimed specifically at enabling MSMEs to scale and
integrate more effectively into larger domestic and global value chains.
The impact of PLI also needs to be assessed as part of a broader and mutually reinforcing
manufacturing policy ecosystem, rather than in isolation. Sector-specific government initiatives
provide complementary support at different stages of the value chain. In pharmaceuticals, for
example, the PLI scheme is complemented by initiatives for Bulk Drug Parks and Medical Device
Parks, which can help address ecosystem and infrastructure constraints. In food processing,
PLI is supported by programmes such as PM Kisan Sampada Yojana and PM Formalisation of
Micro Food Processing Enterprises (PMFME), while in textiles, PM MITRA Parks are intended to
strengthen integrated manufacturing ecosystems. These interventions are further supported
by industrial infrastructure initiatives such as the National Industrial Corridor Development
Programme (NICDP). At the economy-wide level, reforms and initiatives such as PM GatiShakti,
the Insolvency and Bankruptcy Code, competitive corporate tax rates, public procurement
policies and improvements in the investment and business environment contribute to the
conditions required for manufacturing investment to take root and scale. State Governments, too,
play an important role through measures such as single-window clearances, capital incentives,
land facilitation, power-related support and interest subvention. The effectiveness of PLI should
therefore ultimately be judged not only by the incentives disbursed, but by how effectively it
works in conjunction with these complementary policies to create scale, competitive ecosystems,
domestic value addition, employment and sustained integration into global value chains.
This broader policy context also raises a fundamental question for the present assessment: what
should constitute success for the PLI Scheme, and how should its contribution be measured at
its current stage of implementation. Since PLI is a targeted, performance-linked intervention,
its effectiveness is best assessed by examining whether it is translating policy support into
tangible improvements in manufacturing capacity and competitiveness. Accordingly, this report
evaluates the performance of the PLI Scheme across key parameters.
Evaluation Benchmarking
1. The PLI Schemes are designed to accelerate manufacturing in key sectors by promoting
investment, expanding production capacity, generating employment, achieving economies
of scale, deepening domestic value addition and strengthening India’s integration into global
value chains. Accordingly, the performance of the schemes is assessed primarily against
three key parameters: investment, production and employment.
2. The investment data provides the first indication of the extent to which the schemes have
progressed. Cumulative investment has reached ₹ 2,40,138 crore, or 76% of the full-tenure
target of ₹ 3,15,092 crore. Thus, investment mobilisation has already progressed considerably
beyond the halfway point of the schemes’ overall implementation period. This indicates that
a substantial part of the investment envisaged under the schemes has already materialised.

9Impact Assessment of PLI Schemes
3. The production data provides a similar indication of emerging outcomes. Cumulative
production/sales have reached ₹ 22,66,412 crore, equivalent to 64% of the corresponding
full-tenure target of ₹ 35,37,863 crore. More importantly, the year-wise performance shows
that production has been broadly in line with or above annual targets: achievement was
102% up to FY2022-23, 96% in FY2023-24, 107% in FY2024-25 and 119% in FY2025-26.
The aggregate production outcome has therefore already crossed the halfway mark of the
corresponding full-tenure target.
4. The employment trajectory is different. Cumulative employment stands at 8,49,069, or 28%
of the full-tenure target of 30,18,750. However, annual performance has not been uniformly
low: employment achievement was 86% of the target up to FY2022-23, around 85% in
FY2023-24 and 156% in FY2024-25, before falling to 31% of the annual target in FY2025-
26. The divergence between cumulative employment and investment and production is
important for interpreting the overall performance of the schemes.
5. This divergence can be understood in the context of the gestation period of manufacturing
investments. Investment generally takes place before facilities become fully operational;
production then ramps up as capacity is commissioned and utilisation increases, while
employment can evolve further as operations reach commercial scale. Therefore, the three
principal outcome parameters need not progress at the same pace. A lower cumulative
achievement in one parameter, particularly during the implementation phase, cannot
automatically be interpreted as failure to achieve the eventual full-tenure objective.
6. The 14 PLI Schemes have completed 58% of their aggregate implementation period, with
578 months completed against an aggregate duration of 996 months. A substantial 42% of
the aggregate implementation period is still remaining. The portfolio therefore represents a
mix of schemes at different stages of maturity, with some having progressed substantially
and others still moving through the investment and gestation phase. The current stage
is consequently sufficiently advanced to assess emerging outcomes, but not sufficiently
mature to judge the schemes solely against their ultimate full-tenure targets.
7. The disbursement pattern provides further evidence of this progressive maturation. Against
planned disbursement of ₹ 15,401 crore up to FY2023-24, actual disbursement was ₹ 9,721
crore, or 63%. This increased to ₹ 10,114 crore against a plan of ₹ 14,277 crore, or 71%, in
FY2024-25, and further to ₹ 15,519 crore against a plan of ₹ 15,472 crore in FY2025-26,
achieving 100% of the annual target. Overall disbursement over these years has reached
78% of the planned amount.
8. At the same time, cumulative disbursement under the 14 schemes was ₹ 35,354 crore as
of March 2026 against a total financial outlay of ₹ 1,91,049 crore, or 18.51% of the overall
outlay. This apparently low utilisation of the total outlay needs to be viewed in conjunction
with the design of the PLI framework. Incentives are not released upfront; they are linked
to the achievement of specified investment, production and other performance conditions.
As firms expand capacity, scale up production and satisfy progressively higher eligibility
conditions, eligible claims and disbursements increase.
9. Taken together, the evidence reveals an important pattern. The portfolio is 58% through
its aggregate implementation period, investment achievement is 76%, production/sales
achievement is 64%, while employment achievement is 28%. This shows that the schemes

10 Impact Assessment of PLI Schemes
have generated substantial investment and production outcomes, while some outcomes,
particularly employment are still developing. It also demonstrates that outcomes do not
move proportionately with elapsed implementation time.
10. This evidence suggests that a benchmark based simply on the 58% implementation
completion level would not be appropriate. Such a benchmark would effectively assume that
outcomes should progress at the same rate as time elapsed. The available evidence does
not support such a linear relationship. Investment has already moved substantially ahead
of the implementation timeline, production has also crossed the implementation midpoint,
while employment remains below it. The observed pattern is consistent with the normal
sequencing of manufacturing investments, where investment is followed by commissioning,
production ramp-up and subsequently fuller employment generation.
11. Therefore a 50% threshold of targeted investment, production and employment has been
considered as a meaningful mid-course benchmark. At approximately the halfway point of
implementation, achievement of at least half of the corresponding full-tenure target would
indicate that a substantial part of the intended outcome has already materialised. The threshold
is also supported by the actual portfolio experience: both investment and production have
already exceeded 50% of their respective full-tenure targets, while annual production and
employment performance demonstrate that outcomes can accelerate as projects mature.
12. The 50% benchmark has accordingly been applied as a mid-course screening threshold across
the principal outcome parameters, rather than as the final measure of success. A scheme
achieving less than 50% of its full-tenure target at this stage would warrant examination of
the reasons for the gap: such as delays in investment, commissioning, capacity utilisation,
production ramp-up or beneficiary performance. A scheme achieving 50% or more would
indicate that a substantial proportion of the intended outcome has already been realised
during implementation, while still leaving adequate time for further outcomes to materialise.
13. Importantly, 50% is not the desired final achievement. The full-tenure target remains the
ultimate benchmark, and final effectiveness should be assessed against 100% achievement
of the stipulated investment, production and employment outcomes. The 50% threshold
merely provides an evidence-based basis for distinguishing between schemes that are
broadly progressing as the implementation cycle advances and schemes that may require
closer examination during implementation.
Accordingly, the sector-wise assessment in this report examines the extent to which the PLI
Scheme has contributed to outcomes across the four identified dimensions of investment,
production, employment and exports. The assessment further considers whether these
outcomes indicate an impact beyond the underlying or “natural” trend of the respective
industry, recognising that industry performance may also be influenced by broader economic
and sector-specific factors.
The following colour coding is used in the assessment tables to provide a concise visual
representation of the findings:
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable

11Impact Assessment of PLI Schemes
The framework described above is applied consistently across all 14 PLI sectors. For each
sector, the available evidence is examined against the four outcome dimensions – investment,
additional production, export potential and employment generation, with particular emphasis on
whether the observed performance indicates outcomes beyond the underlying industry trend.
The assessment also takes into account the stage of implementation of each scheme and the
availability and quality of sector-specific data. Where a scheme is still within its gestation period,
it is not considered appropriate to draw a definitive conclusion on outcomes that would ordinarily
materialise only after manufacturing capacity becomes operational. Similarly, where reliable data
are not available, the assessment does not infer an outcome in the absence of evidence.
The following Table provides a summary view of the extent to which each sector is on track
across the four identified parameters, while the detailed sector-wise chapters that follow
provide the underlying data, analysis and rationale supporting each assessment.
Table 2: Evaluation of Impact of PLI Scheme
Sl.
No.
Sector Investments ProductionExports Employment
1
Large Scale Electronics
Manufacturing
2
Critical Key Starting
materials/Drug Intermediaries
and Active Pharmaceutical
Ingredients (Bulk Drugs)
 
3
Manufacturing of Medical
Devices
4
Pharmaceuticals drugs
5
Electronic/Technology
Products (IT Hardware 2.0)
 
6
Telecom & Networking
Products
7
Automobiles & Auto
Components
8
Advanced Chemistry Cell
(ACC) Battery
Production yet to commence
9 Drones & Drone Components
10
Textile Products: MMF
segment and technical
textiles
11White Goods (ACs & LED)
12
High Efficiency Solar PV
Modules
Scheme in gestation period
13Food Products
14
Speciality Steel

12 Impact Assessment of PLI Schemes
The sector-wise position of these four parameters is presented in Table 2. The table also
identifies schemes that are still within their gestation period or whose scheme tenure has been
completed, thereby providing important context for interpreting the reported outcomes.
Taken together, the analysis in this chapter establishes the framework for assessing the
contribution of the PLI Scheme to India’s manufacturing objectives. The scheme represents
a targeted effort to accelerate investment, build manufacturing scale, strengthen domestic
capabilities and enhance global competitiveness in selected strategic sectors. While the
aggregate outcomes already indicate significant activity across investment, production and
employment, the extent and nature of impact vary across sectors, reflecting differences in
scheme maturity, industry characteristics and implementation cycles. The subsequent chapters
therefore examine each of the 14 PLI sectors in detail, assessing performance against the four
identified parameters and considering whether the outcomes observed indicate an incremental
contribution beyond the underlying industry trend. This sector-wise assessment provides the
basis for identifying areas where PLI is delivering the intended outcomes, sectors where results
are still emerging, and areas where further policy attention may be warranted.
Table 3: Total Disbursement under the PLI Scheme across 14 Schemes
Sl.
No.
Sectors
*Disbursement till
March 26 (` Crore)
Disbursement (%)
1 Large Scale Electronics Manufacturing 19,091 55.83%
2
Critical Key Starting materials/Drug
Intermediaries and Active Pharmaceutical
Ingredients (Bulk Drugs)
88 1.27%
3 Manufacturing of Medical Devices 267 7.79%
4 Pharmaceuticals drugs 6,659 44.39%
5
Electronic/Technology Products (IT
Hardware 2.0)
98 0.57%
6 Telecom & Networking Products 2,756 22.59%
7 Automobiles & Auto Components 2,386 9.20%
8 Advanced Chemistry Cell (ACC) Battery - -
9 Drones & Drone Components 93 77.50%
10
Textile Products: MMF segment and
technical textiles
386 3.61%
11 White Goods (ACs & LED) 580 9.29%
12 High Efficiency Solar PV Modules - -
13 Food Products 2,714 24.89%
14 Speciality Steel 236 3.73%
  GRAND TOTAL 35,354 18.51%
* The values are cumulative till March 2026

13Impact Assessment of PLI Schemes
Table 4: Sector Wise PLI Indicators Performance till March 2026
S.
No.
Sectors
Investment
(` Crore)
Production / Sales
(` Crore)
Employment
(Numbers)
FY
2025–26
Cumulative
till Mar 26
FY
2025–
26*
Cumulative
till March
26
FY
2025–
26
Cumulative
till March
26
Actual Actual Actual
1
Large Scale
Electronics
Manufacturing
9,282 20,580 3,79,05511,61,5051,69,2491,69,249
2 Bulk Drugs 516 50,70 1,452 3,270 736 5,226
3
Manufacturing of
Medical Devices
134 1,151 5,022 14,945 108 5,268
4
Pharmaceuticals
Drugs
7,820 45,158 97,962 3,64,588 21,348 1,14,880
5IT Hardware 2.0 310 908 9,793 21,853 1,673 4,859
6
Telecom &
Networking
Products
1,268 5,278 31,379 1,10,016 7,145 33,610
7
Automobiles & Auto
Components
14,750 44,326 32,661 52,414 22,833 67,820
8
Advanced
Chemistry Cell
(ACC) Battery
2,672 4,570 0 0 405 1,245
9
Drones & Drone
Components
## 595 ## 1,379 ## 2,650
10
Textile Products:
MMF Segment &
Technical Textiles
1,555 8,117 6,632 11,241 8,748 33,427
11
White Goods (ACs
& LEDs)
1,042 6,409 14,798 43,150 - 52,703
12
High Efficiency
Solar PV Modules
(Tranche I & II)*
- 64,873 Gestation Period 14,794
13Food Products 9,207 9,207 96,724 4,82,051 4,882 3,29,200
14Speciality Steel 3,029 23,896
1337
(‘000
tonnes)
2,774 (‘000
tonnes)
4,398 14,138
  TOTAL 51,585 2,40,1386,75,47822,66,4122,41,5258,49,069
## The scheme tenure has been completed
* year-wise target is not mentioned in Cabinet Note/Scheme guidelines

14 Impact Assessment of PLI Schemes
PLI Scheme Across
14 Sectors
Analysis
of the Impact of the

15Impact Assessment of PLI Schemes
The Production Linked Incentive
Scheme for Large Scale Electronics
Manufacturing (LSEM)
1.

16 Impact Assessment of PLI Schemes
1.1 PLI Scheme on Large Scale Electronics Manufacturing
1.1.1 Overview
The Production Linked Incentive (PLI) Scheme for Large Scale Electronics
Manufacturing (LSEM) is designed to boost domestic manufacturing and attract
large-scale investments across the electronics value chain, including electronic
components and semiconductor packaging. With a substantial outlay of
₹34,193
crore spread over five years, the scheme aims to position India as a global
manufacturing hub while reducing import dependence and enhancing export
competitiveness.
The scheme covers multiple segments, including specified electronic components
and mobile manufacturing under both domestic and global categories, across
two rounds. Performance, however, varies across these segments. In the specified
electronic components segment under Round 1, initial growth in production and
sales is observed up to 2022, followed by a subsequent decline. Similar patterns
are seen in imports, exports, and employment, suggesting that early gains were
not sustained. Data limitations are also evident, as only a small number of firms
have reported consistently, and incentive disbursement has been minimal, with
only one firm receiving PLI benefits in this category.
1.1.2 Implementation Strategy
The implementation strategy of PLI-LSEM is centred on providing targeted and
performance-linked support to large-scale electronics manufacturing. The scheme
links incentives to incremental sales of eligible goods manufactured in India, while
also requiring participating companies to meet specified investment thresholds.
Progressive annual targets are intended to encourage firms to expand production
capacity and achieve scale over the incentive period. The scheme combines
participation by global and domestic manufacturers with support for selected
electronic components, thereby seeking to strengthen India’s integration into
global value chains and gradually expand domestic manufacturing capabilities.
1.1.3 Performance Analysis
Across Rounds 1 and 2 of PLI-LSEM, performance has varied across product
segments. The specified electronic components segment, covered in both
rounds, shows a broadly similar pattern, with production/sales, exports, imports
and cumulative employment increasing initially and reaching their highest levels
around 2022, followed by a decline in subsequent years. Although production
levels remain above initial levels, both exports and imports have fallen below earlier
benchmarks, indicating weakening momentum. The limited scale of disbursement
in this segment further reflects its relatively modest progress compared to other
parts of the scheme.
In contrast, the mobile manufacturing segment, both domestic and global
demonstrate strong and sustained growth across key indicators. Production and

17Impact Assessment of PLI Schemes
sales have increased consistently from 2020 to 2025, supported by significant
participation and higher incentive disbursement. In the domestic mobile segment,
a few leading firms drive performance, with one firm accounting for a substantial
share of both production and exports. However, imports in this segment remain
significantly higher than exports, highlighting continued dependence on imported
components despite increased domestic assembly. The global mobile segment
shows even stronger outcomes, with multiple firms receiving large incentive
disbursements and contributing to rising production and export levels.
In the domestic mobile segment under Round 1, all key indicators, including
production/sales, exports and employment, show an increasing trend between
2020 and 2025, have also remained significant. Five companies participated in
this segment, with two companies receiving
₹1,040.78 crore in PLI incentives as of
September 2025.
Across the scheme, employment trends broadly mirror production performance.
Segments with sustained growth, particularly mobile manufacturing, exhibit
increasing employment, while those experiencing volatility, such as specified
electronic components, show corresponding fluctuations. However, data
limitations—particularly the absence of consistent import tracking and the ministry’s
stance that production and export outcomes are market-driven—constrain the
ability to fully attribute observed trends to the scheme.
Overall, the PLI scheme for electronics manufacturing appears to have successfully
stimulated additional investment beyond natural trends and has translated this
into increased production and employment. Export performance has improved in
certain segments, particularly mobile manufacturing, although gains are uneven
across categories. While the scheme has made significant progress in scaling
up domestic manufacturing, especially in mobile assembly, challenges remain in
deepening value addition and sustaining growth in component manufacturing
segments.
1.1.4 Industry Performance
The PLI Scheme for Large Scale Electronics Manufacturing (PLI-LSEM), notified
in April 2020, delivered a transformative impact on India’s mobile phone
manufacturing sector, comfortably surpassing its own targets across every major
metric. Mobile phone production rose roughly 30–fold, from about
₹18,000 crore
in 2014–15 to
₹5.45 lakh crore by 2024–25 and beyond, while exports surged from
around
₹1,500 crore to over ₹2 lakh crore in the same period.
The number of mobile manufacturing units grew from just 2 to around 300, a 150-
fold increase, and the share of domestically-made mobile phones sold in India
rose from 26% in 2014-15 to 99.2% in later years, with India standing as the world’s
second-largest mobile phone manufacturer.
On the value-addition front, domestic value addition rose substantially though it

18 Impact Assessment of PLI Schemes
is still an area needing deeper focus, since India’s growth rested largely on final
assembly with imported displays, batteries, and printed circuit board assemblies
rather than deep component manufacturing. This gap between headline volume
success and shallow value-chain integration directly shaped the design of the
₹62,500 crore Mobile Phone Manufacturing Scheme (MPMS), approved in July 2026
to succeed PLI-LSEM and run through FY 2030–31, shifting the policy emphasis
from pure production scale-up toward deeper domestic sourcing, design, R&D,
and the development of Indian brands.
1.1.5 Evaluation Matrix for Analysing Impact Assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focus on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:
Parameters Impact
Investments–
₹20,580.20 crore
Production
–11,61,505 crore
Exports
Employment Generation (in Nos.) – 1,69,249
*cumulative till March 2026
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable
Production values have fallen in 2025–26 but still are over 50% of the targets.
Export for some categories have increased more than the others.
1.1.6 Key Insights:
(i) Among all Production Linked Incentive (PLI) schemes, this scheme has
emerged as one of the most efficient in terms of resource Utilisation and
output generation. Mobile phone exports have witnessed remarkable growth,
rising almost nine-fold from
₹22,868 crore in FY 2021 to about ₹2,00,000

19Impact Assessment of PLI Schemes
crore in FY 2025. During the same period, mobile phone imports declined
by 77%, reflecting a significant strengthening of domestic manufacturing
capabilities. Beyond the growth of mobile phone production itself, PLI has
catalysed investment and capacity expansion across the wider electronics
manufacturing ecosystem, helping India emerge as an increasingly important
manufacturing and export base within global value chains.
(ii) The scheme’s performance has been highly encouraging. While a substantial
share of benefits has accrued to large global manufacturers, domestic firms
have also demonstrated good performance in terms of production, investment,
exports, and employment generation. The scheme was intentionally designed
to incentivise large-scale mobile phone assembly, with value addition not
prescribed as a mandatory criterion. This approach was adapted to rapidly
scale up mobile manufacturing in the country while gradually building a robust
domestic supply chain and component ecosystem.
(iii) The scheme has successfully expanded production, attracted investment,
and generated employment, while also laying the foundation for the recently
launched Electronics Component Manufacturing Scheme (ECMS) with an
outlay of
₹40,000 crore and Mobile Phone Manufacturing Scheme (MPMS)
with an outlay of
₹62,500 crore. The new schemes are designed to deepen
domestic value addition and strengthen the electronics manufacturing
ecosystem further.
(iv) Overall, the PLI Scheme for Large Scale Electronics Manufacturing has
effectively stimulated incremental investment beyond prevailing market
trends and translated these investments into substantial gains in production,
exports, and employment. Export performance has been particularly strong in
the mobile phone segment and the scheme has made significant progress in
scaling up domestic manufacturing, especially in mobile assembly.

20 Impact Assessment of PLI Schemes
The Production Linked Incentive
Scheme for Promotion of Domestic
Manufacturing of Critical Key Starting
Materials (KSM)/ Drug Intermediates
(DIs)/Active Pharmaceutical
Ingredients (APIs)-Bulk Drugs
2.

21Impact Assessment of PLI Schemes
2.1 PLI Scheme on Bulk Drugs
2.1.1 Overview
The PLI scheme on bulk drugs with an outlay of ₹6,940 crore, aims to boost domestic
manufacturing of identified Key Starting Materials (KSMs), Drug Intermediates and
Active Pharmaceutical Ingredients (APIs) and attract large-scale investments in
the sector. It covers four product segments: (i) key fermentation-based KSMs/Drug
Intermediates; (ii) niche fermentation-based KSMs/Drug Intermediates/APIs; (iii)
key chemical synthesis-based KSMs/Drug Intermediates; and (iv) other chemical
synthesis-based KSMs/Drug Intermediates/APIs.
Table 2.1: Fund Disbursement
Segments
No. of Firms
Approved
No. of PLI
Recipients
PLI Disbursed (
₹crore)*
Target Segment I – Key Fermentation Based
KSMs/Drug Intermediates
4 0 0
Target Segment II – Fermentation Based
Niche KSMs/Drug Intermediates/APIs
3 0 0
Target Segment III – Key Chemical Synthesis
Based KSMs/Drug Intermediates
5 1 6.73
Target Segment IV – Other Chemical
Synthesis Based KSMs/Drug Intermediates/
APIs
21 5 29.59
Total 33 6 36.32
* Cumulative till FY June 25
The segment-wise analysis of the pharma bulk drugs sector under the PLI scheme
reveals a mixed but gradually strengthening of performance across sales, exports,
employment, and investment, with significant variation across segments.
Segment IV emerges as the most stable and consistent performer, driving overall
sectoral growth. It records steady increases in sales, relatively stable export
performance with signs of recovery, and sustained employment generation. Its
strong and resilient performance indicates efficient capacity Utilisation and robust
demand conditions, making it the backbone of the sector under the scheme.
Segment I reflects a late but sharp entry into production. The absence of sales
until 2023–24 followed by a substantial increase in 2024–25 indicates recent
commencement of commercial operations and a transition into a scale-up phase.
However, exports remain absent, suggesting a current domestic focus, while
employment trends, though increasing, remain inconclusive due to the short
operational timeline.
Segment II shows gradual and balanced growth. Sales and exports both increase
steadily from a low base, indicating improving market integration. Employment

22 Impact Assessment of PLI Schemes
trends are positive overall despite some fluctuations, suggesting stable expansion.
This segment reflects a measured and steady scaling trajectory.
In contrast, Segment III exhibits a sustained decline across all key indicators.
Sales and exports fall significantly over the period, accompanied by a decline in
employment. This points to underlying structural challenges, potentially linked to
reduced competitiveness, changing demand patterns, or external market pressures.
At an aggregate level, sales trends indicate a structural shift within the sector,
with growth concentrated in more competitive segments, particularly Segment
IV. Export performance shows volatility, with a dip in 2023–24 followed by partial
recovery in 2024–25, suggesting temporary market adjustments rather than a
persistent downturn. Employment trends broadly align with production dynamics;
though temporary adjustments are visible in certain periods. A key highlight of the
analysis is the sharp increase in investment in FY 2024–25, significantly exceeding
targets. This indicates renewed industry confidence and points toward future
capacity expansion.
In terms of outcomes, the PLI scheme has led to additional investment, production,
and employment beyond natural trends. Export potential has also improved,
though unevenly across segments, with stronger gains in some segments relative
to others.
Overall, while the sector shows positive momentum driven by strong-performing
segments and rising investments, the presence of structural weaknesses in certain
segments and variability in export performance suggests that the gains under the
scheme remain uneven and evolving.
2.1.2 Implementation Strategy
The PLI Scheme for Bulk Drugs adopts a targeted and performance-based
implementation strategy aimed at creating domestic manufacturing capacity
for critical Key Starting Materials (KSMs), Drug Intermediates (DIs) and Active
Pharmaceutical Ingredients (APIs), thereby reducing import dependence and
strengthening India’s pharmaceutical supply chain. The scheme focuses on 41
identified products across four segments, covering key and niche fermentation-
based as well as chemical synthesis-based KSMs, DIs and APIs. The strategy
emphasises the establishment of new manufacturing capacity through Greenfield
projects.
Selected firms are required to commission their manufacturing facilities within
stipulated timelines, and incentive claims are subject to verification of investment,
production and other prescribed conditions. The implementation framework has
also been periodically revised in response to stakeholder feedback and emerging
implementation challenges, providing flexibility to address issues during the course
of the scheme.

23Impact Assessment of PLI Schemes
2.1.3 Performance Analysis
Performance across the four target segments has been mixed, with significant
variations in sales, exports, employment and investment. Segment IV has emerged
as the primary growth driver, recording consistent growth in sales and relatively
stable exports, while Segment I reflects the recent commencement and scaling-up
of production and Segment II shows gradual expansion from a relatively low base.
In contrast, Segment III has witnessed a sustained decline in sales, exports and
employment, indicating greater exposure to global price movements, competitive
pressures and fluctuations in demand. Export performance across the segments
has been uneven, with a decline in 2023–24 followed by some recovery in 2024–25;
while Segment IV provides relative stability, Segment II is gradually developing an
international market presence and Segment I has yet to establish export activity.
Employment outcomes broadly mirror production trends, with growth in Segment
I but mixed outcomes across the other segments, including some workforce
adjustments.
Against this backdrop, the overall impact of the PLI Scheme appears moderate in
terms of output and exports during the period under review, although investment
recorded a pronounced increase in FY 2024–25. The sharp rise in investment may
indicate improving investor confidence and could support further capacity expansion
and production growth in the coming years. Overall, the divergent performance
across segments suggests that market conditions, product characteristics, global
competitiveness and the stage of capacity development have played an important
role in determining outcomes alongside the PLI support.
(i) Target Segment I: Key Fermentation-Based KSMs/Drug Intermediates
Segment I appears to be in an early expansion and scale-up phase. No sales
were reported in 2023–24, followed by a sharp increase to approximately 261.6
crore in 2024–25, indicating that commercial production has commenced only
recently. Employment has also shown a consistent year-on-year increase,
broadly reflecting the commencement and expansion of production. However,
no exports have been reported during the period under review, suggesting that
production remains primarily domestically oriented and that firms have yet
to establish a significant international market presence. Overall, the segment
appears to be consolidating its domestic production base, with the potential
for exports and further employment generation to emerge as production
capacity stabilises and firms achieve greater scale. (Refer Graphs B.2 and B.11
in the Appendix.)
(ii) Target Segment II: Fermentation-Based Niche KSMs/Drug Intermediates/APIs
Segment II demonstrates gradual and measured growth, with sales increasing
from
₹24.7 crore in 2023–24 to ₹33.4 crore in 2024–25. Exports increased
notably in 2023–24 and remained broadly stable in 2024–25, indicating a
gradual emergence of firms in international markets, although the overall scale

24 Impact Assessment of PLI Schemes
remains modest. Employment has also shown an overall positive trend, despite
some fluctuations and a decline in the third year, which may reflect temporary
workforce adjustments. The simultaneous improvement in sales and exports
suggests that the segment is progressively strengthening its domestic and
international market integration. Overall, Segment II appears to be scaling in a
balanced manner, although the relatively low base of production and exports
indicates considerable scope for further expansion. (Refer Graphs B.3, B.6 and
B.12 in the Appendix.)
(iii) Target Segment III: Key Chemical Synthesis-Based KSMs/Drug Intermediates
Segment III exhibits significant deterioration in performance, with sales
declining sharply from approximately
₹285 crore in 2022–23 to nearly ₹120
crore in 2024–25. Export performance broadly follows the same pattern,
with a sharp decline in 2023–24 and only a partial recovery thereafter, while
employment also declined in the third year, potentially reflecting workforce
rationalisation in response to lower production and demand. The simultaneous
weakening of sales, exports and employment indicates that the segment is
facing considerable market and competitiveness-related challenges. These
may include global price corrections, intensified competition, fluctuations
in international demand and the post-COVID normalisation of demand for
certain APIs. Given the exposure of chemical synthesis-based KSMs and Drug
Intermediates to global prices and international competition, these factors
may have moderated the impact of PLI support and limited the extent of gains
achieved under the scheme. Overall, Segment III appears to be under structural
and market-related stress, warranting closer monitoring of its competitiveness
and capacity utilisation. (Refer Graphs B.4, B.7 and B.13 in the Appendix.)
(iv) Target Segment IV: Other Chemical Synthesis-Based KSMs/Drug
Intermediates/APIs
Segment IV has emerged as the strongest and most consistent performing
segment under the scheme, with sales increasing from approximately
₹250
crore in 2022–23 to around
₹330 crore in 2024–25. Exports have remained
relatively stable, with a decline in 2023–24 followed by partial recovery in
2024–25, indicating resilience to fluctuations in international market conditions.
Employment has also shown a broadly positive trend, with continued job
creation despite some fluctuations in the pace of growth. The consistent
performance across sales, exports and employment indicates relatively
favourable demand conditions, expanding production and stronger market
resilience. Overall, Segment IV can be considered the principal contributor to
the scheme’s performance, although continued monitoring would be necessary
to assess whether this growth translates into sustained competitiveness and
higher export penetration. (Refer Graphs B.5, B.8 and B.14 in the Appendix.)

25Impact Assessment of PLI Schemes
2.1.4 Evaluation Matrix for Analysing Impact assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focus on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:
Parameters Impact
Investments – ` 5,070 crore  
Production – ` 3,270 crore  
Exports  
Employment Generation (in Nos.) – 5,226  
*cumulative till march 2026
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable
From FY 2024–25 the investments have increased significantly, well above targets.
Exports have increased more in some segments than others.
2.1.5 Key Insights:
(i) The Bulk Drugs initiative represents a shift towards reducing dependence on
external supply chains for critical pharmaceutical ingredients. Once heavily
dependent on imports for essential raw materials, India’s pharma backbone
is now regaining its strength. The country transitioned from a net importer
(
₹1,930 crore deficit in FY 2021–22) to a net exporter of bulk drugs ( ₹2,280
crore surplus in FY 2024–25). Before the PLI intervention, India imported
nearly 70% to 80% of its bulk drugs, but the PLI Scheme has helped establish
a manufacturing capacity of about 55,000 MT across 26 critical APIs,
significantly strengthening domestic production capacity and reducing import
dependence for products such as Paracetamol, levofloxacin, and Norfloxacin.
The intervention has strengthened investment in an upstream pharmaceutical
manufacturing ecosystem of strategic importance, extending its impact
beyond individual products to the broader domestic supply chain.

26 Impact Assessment of PLI Schemes
(ii) The implementation of certain projects under the scheme has experienced
delays due to disruptions caused by the COVID-19 pandemic and procedural
delays in obtaining regulatory approvals, including environmental clearances,
drug manufacturing licences, and land acquisition approvals. Segment-wise
analysis reveals a mixed but gradually strengthening performance across sales,
exports, employment, and investment, with considerable variation among
product categories.
(iii) Under the PLI Scheme for Bulk Drugs, the fermentation-based segment has
exhibited moderate performance, reflecting the inherent characteristics of this
technology-intensive industry. Fermentation-based projects generally involve
longer gestation periods due to higher capital investment requirements,
complex manufacturing processes, and significant technological challenges.
Consequently, the segment witnessed limited sales activity up to 2023–24.
However, the increase in sales recorded in 2024–25 indicates that several
projects have recently commenced commercial operations and are transitioning
into the scale-up phase. While the segment’s performance has been relatively
gradual compared to chemical synthesis-based products, the recent growth
trajectory suggests improving production capacities and a strengthening
domestic manufacturing base.
(iv) Chemical Synthesis-based segment has emerged as the most stable and
consistent performer, serving as the principal driver of overall sectoral growth.
The segment has recorded sustained growth in sales, relatively stable export
performance with signs of recovery, and continuous employment generation.
Its resilience and strong operational performance suggest efficient capacity
Utilisation and robust market demand, making it the backbone of the sector
under the scheme.
(v) In terms of outcomes, the scheme has generated additional investment,
production, and employment beyond underlying market trends. Export
potential has also improved, although gains have been uneven across segments,
with some categories demonstrating stronger performance than others.
(vi) The APIs available in the international markets may be cheaper than the Indian
counterparts, making it rational for the Indian pharmaceutical companies
to buy from there. Second, gestation period is long, especially in a volatile
market. Some of the trends such as establishment of API and Bio-Tech parks
indicate that the sector is poised to take advantage of the scheme in a short
period. Overall, the sector is exhibiting positive momentum, supported by
strong-performing segments and rising investment activity. Beyond its direct
economic impact, the scheme has also contributed to technology development
for the manufacture of targeted products.

Impact Assessment of PLI Schemes
85 // Confidential Confidential // 86

28 Impact Assessment of PLI Schemes
The Production Linked Incentive
Scheme for Manufacturing of
Medical Devices
3.
Impact Assessment of PLI Schemes
85 // Confidential Confidential // 86

29Impact Assessment of PLI Schemes
3.1 PLI Scheme on Medical Devices
3.1.1 Overview
The Production Linked Incentive (PLI) Scheme for Medical Devices is aimed at
strengthening domestic manufacturing capabilities and attracting significant
investments into the sector. With a total outlay of
₹3,420 crore, the scheme seeks
to reduce import dependence and promote the development of a robust medical
devices manufacturing ecosystem in India.
The scheme covers four target segments, namely cancer care/radiotherapy devices,
radiology and imaging medical devices, anaesthesia and cardio-respiratory medical
devices, and other medical devices.
Applicants are classified into Category A and Category B. Category A carries a
maximum incentive of
₹121 crore per applicant, while Category B carries a maximum
incentive of
₹40 crore per applicant, with both categories receiving an incentive
of 5 per cent on eligible incremental sales. Category B was introduced through
the revised guidelines to extend support to an additional set of specified medical
devices, subject to prescribed incremental-sales thresholds.
3.1.2 Implementation Strategy
The scheme was implemented through multiple rounds of applications, covering four
identified target segments of medical devices. Eligible applicants were classified
into Category A and Category B, with Category A comprising specified high-
value medical devices and Category B covering other eligible devices. Category A
applicants were required to meet a higher net-worth threshold of at least 30% of
committed investment, while Category B applicants were required to have positive
net worth. Selection was undertaken based on prescribed eligibility and evaluation
criteria, subject to available scheme outlay. Selected applicants were eligible for a
5% incentive on incremental sales of manufactured medical devices for five years,
subject to category-wise ceilings.
3.1.3 Performance Analysis
In terms of performance, the scheme has shown strong outcomes in investment.
Actual investment has consistently exceeded stipulated targets, indicating a
positive response from industry participants. This suggests that the scheme has
successfully stimulated additional investment beyond natural trends.
Production performance, as reflected in sales, has also been positive, with cumulative
values indicating growth in output. While production levels remain modest relative
to the scale of the scheme, the data suggest that increased investment has translated
into higher production beyond expected trends. Employment generation shows a
mixed but improving pattern. Although employment was relatively low compared
to annual targets in 2024–25, it has surpassed targets in 2025–26. However, this
improvement should be interpreted cautiously, as overall targets for 2025–26 were

30 Impact Assessment of PLI Schemes
lower than in previous years.
Despite these positive indicators, the limited disbursement of incentives and the
modest scale of production and employment suggest that the scheme is still in
a developing phase. Additionally, the absence of export-specific trend analysis
restricts the ability to assess improvements in global competitiveness.
Overall, the PLI scheme for medical devices demonstrates encouraging progress,
particularly in terms of investment and production. While employment outcomes
are improving and have recently surpassed targets, the scheme’s full impact is yet
to be realised.
3.1.4 Evaluation Matrix for Analysing Impact assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focus on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:
Parameters Impact
Investments – ` 1,151 crore 
Production – ` 14,945 crore  
Exports  
Employment Generation (in Nos.) – 5,268  
*cummulative till march 26
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable
Employment generation was significantly low (as compared to the yearly target) in
year 2024–25 but it has surpassed targets in 2025–26. Overall targets for 2025–26
were quite low compared to the previous year.

31Impact Assessment of PLI Schemes
3.1.5 Key Insights:
(i) The Medical Devices PLI is catalysing the development of domestic
manufacturing capability in a high-technology sector where India has
historically depended significantly on imported equipment. The scheme has
made significant progress in promoting domestic manufacturing and reducing
import dependence in high-value medical device segments, including:
a) Advanced imaging equipment
b) Cancer care equipment (LINAC, cobalt therapy machines)
c) Cardiac and orthopaedic implants
d) Dialysers and critical care equipment
(ii) The scheme has also enabled domestic manufacturing of key diagnostic and
therapeutic equipment such as CT scanners, MRI machines, Cath labs, and
ultrasonography systems. The growth of this sector demonstrates the catalytic
role of PLI in creating a domestic manufacturing ecosystem in technologically
sophisticated segments where capacity creation requires sustained investment,
specialised capabilities and technology development.
(iii) At the design stage, the scheme prescribed high minimum threshold sales
requirements, which limited participation, particularly among smaller MedTech
start-ups and MSMEs. The companies had the flexibility of reporting self-
committed investment, despite this, minimum threshold investment could not
be achieved. Although the Department subsequently introduced a Category
B with lower eligibility thresholds, early gains under the scheme remained
largely concentrated among larger firms.
(iv) In terms of performance, the scheme has demonstrated strong outcomes on
the investment front. Actual investments have consistently exceeded stipulated
targets, with the gap between targets and achievements widening over time.
This indicates a strong and sustained positive response from industry and
suggests that the scheme has successfully catalysed investment beyond
natural market trends. Production performance, as reflected in sales, has also
shown a steady upward trajectory, with cumulative output reflecting sustained
growth. Employment generation presents a mixed but improving trend, with
recent performance indicating stronger job creation outcomes.
(v) Despite these positive developments, the relatively modest level of incentive
disbursement and the still developing scale of production and employment
suggest that the scheme remains in an early growth phase. Its full impact,
particularly in terms of deep manufacturing capabilities and ecosystem
development, is yet to be fully realised.
(vi) Overall, the PLI Scheme for Medical Devices demonstrates encouraging
progress, especially in investment mobilisation and production growth. While
employment outcomes are improving and have recently begun to align more
closely with targets, the scheme’s full potential is still unfolding and will become
clearer with further Maturity of participating firms and manufacturing capacities.

32 Impact Assessment of PLI Schemes
The Production Linked Incentive
Scheme for Pharmaceuticals Drugs
4.

33Impact Assessment of PLI Schemes
4.1 PLI Scheme on Pharmaceuticals Drugs
4.1.1 Overview
The Pharmaceutical Production Linked Incentive (PLI) Scheme, with an outlay of
₹15,000 crore, aims to enhance India’s manufacturing capabilities and production
in the pharmaceutical sector, promote investment, and facilitate product
diversification towards high-value pharmaceutical goods. The scheme also seeks
to strengthen India’s position in global pharmaceutical value chains and support
the emergence of globally competitive Indian companies.
The beneficiaries are classified into three categories based on their global
manufacturing revenue from pharmaceutical goods and/or in-vitro diagnostic
medical devices in FY 2019–20: Group A, comprising companies with revenue of
₹5,000 crore or more; Group B, comprising companies with revenue of ₹500 crore
or more but less than
₹5,000 crore; and Group C, comprising companies with
revenue of less than
₹500 crore, including MSMEs.
Table 4.1: Fund Disbursement
Beneficiary Category No. of Applicants
No. of PLI
Recipients
Amount of PLI
Received (
₹crore)*
Group A 11 11 3,340.71
Group B 9 9 838.31
Group C – MSMEs 16 10 108.13
Group C – MSMEs (IVDs) 4 3 31.48
Group C – Non-MSMEs 14 14 237.95
Group C – Non-MSMEs (IVDs) 1 1 2.22
Total 55 48 4,558.80
* Cumulative fund disbursement till FY 2023–24, with two firms (across Group A and Group B) having
submitted 9-monthly claims for FY 2024–25.
The category-wise assessment of firms under the PLI scheme indicates a positive
overall impact on investment, production, employment, and exports, with clear
differences in outcomes across firm sizes.
Large firms (Group A) are the primary drivers of performance. They demonstrate
strong and consistent growth in sales, lead export expansion, and show sustained
employment generation over the assessment period. Their scale, established market
presence, and integration with global supply chains enable them to effectively
leverage scheme incentives and contribute significantly to overall outcomes.
Mid-sized firms (Group B) exhibit steady and stable growth across key indicators.
Sales and exports increase at a moderate but consistent pace, while employment
generation remains positive throughout. Although their performance is not as
strong as that of large firms, the trends indicate effective Utilisation of the scheme
in supporting gradual expansion.

34 Impact Assessment of PLI Schemes
MSMEs (Group C firms) display more variable performance. While there are initial
gains in sales and employment, growth slows in the later period before showing
partial recovery. Export performance remains relatively limited compared to
larger firms, reflecting structural constraints such as scale and market access.
Employment trends are positive overall but show greater fluctuations, indicating
higher sensitivity to operational and market conditions.
4.1.2 Implementation Strategy
The scheme is implemented across three categories of beneficiaries: Group A, B
and C. The scheme covers three different product categories for which applicants
have applied under the scheme. These products are expected to give an impetus to
innovation, R&D and widening of product profile of India Pharmaceutical industry.
4.1.3 Performance Analysis
(i) Group A Firms (Large Firms)
Group A firms demonstrate a strong and consistent growth trajectory in sales,
reflecting their established market presence, superior production capacity
and ability to scale operations efficiently. Their export performance is similarly
robust, with exports increasing steadily, supported by established global
supply chains, stronger compliance capabilities and deeper integration with
international markets. Consequently, Group A firms emerge as the leading
contributors to the overall export expansion under the scheme. Employment
generation also shows a consistently positive trend, broadly in line with
their expanding production and operational scale. Overall, the performance
of Group A firms indicates that larger firms have been able to leverage the
scheme effectively to expand production, strengthen market presence and
increase employment. Refer Graphs C.2 and C.15 in the Appendix.
(ii) Group B (Mid-sized Firms)
Group B firms exhibit stable and positive growth in sales, although the pace of
expansion is relatively moderate compared with Group A firms. Their export
performance broadly follows the sales trajectory, with exports registering
growth but remaining lower in scale and pace than those of larger firms,
suggesting relatively limited integration with global markets. Employment
trends are also broadly positive, with continued job creation over the
assessment period and no evidence of a sustained decline, indicating stable
labour absorption alongside output growth. Taken together, the performance
of Group B firms suggests that mid-sized enterprises have benefited from the
scheme through gradual expansion in production, exports and employment,
although their ability to achieve the scale and global market penetration
observed among Group A firms remains comparatively limited. Refer Graphs
C.3 and C.16 in the Appendix.

35Impact Assessment of PLI Schemes
(iii) Group C firms (MSMEs)
Group C firms including MSMEs, show a more uneven performance profile
compared with Groups A and B. Sales initially registered an upward trend,
indicating early gains following scheme participation; however, growth
moderated after 2022, followed by a partial recovery. This pattern suggests
greater sensitivity of smaller firms to market fluctuations and operational
constraints. Export performance remains relatively subdued, with growth falling
short of that achieved by larger firms, reflecting challenges related to limited
scale, compliance costs and access to international markets. Employment
generation nevertheless shows an overall increasing trend, although fluctuations
are more pronounced, highlighting the greater vulnerability of smaller firms to
cyclical and operational pressures. Refer Graphs C.4–C.8 and C.17–C.20 in the
Appendix.
4.1.4 Evaluation Matrix for Analysing Impact assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focus on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:
Parameters Impact
Investments –
`45,158 crore
 
Production – `3,64,588 crore  
Exports  
Employment Generation (in Nos.) – 1,14,880  
*cumulative till march 26
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable

36 Impact Assessment of PLI Schemes
Actual production values surpassed targets in 2024–25 but the values fell in 2025–
26. It was still more than 50% of the target. Export values were partially higher for
some categories than others where the increase is modest.
4.1.5 Key Insights:
(i) PLI has added a new dimension to India’s established pharmaceutical strength
by encouraging investment in high-value formulations, biologics, and critical
pharmaceutical inputs. The emergence of domestic manufacturing of 191
pharmaceutical products for the first time in India is particularly significant,
demonstrating the Scheme’s role in expanding domestic technological and
manufacturing capability. Total exports of pharmaceutical products rose by
32.7%, from USD 19,460.5 million in 2021 to USD 25,822.2 million in 2025. The
broader impact of PLI has therefore been to catalyse investment and move the
pharmaceutical sector towards greater technological sophistication, domestic
value addition, and strategic manufacturing capability.
(ii) The PLI Scheme for Pharmaceutical Drugs, with an outlay of
₹15,000 crore,
has successfully catalysed investments exceeding
₹45,000 crore, reflecting a
strong investment response from the industry. The scheme has 55 approved
applicants across three categories of firms.
(iii) Large firms (Group A) have emerged as the principal drivers of the scheme’s
performance. These firms have demonstrated strong and sustained growth in
sales, export led expansion, and generated substantial employment throughout
the assessment period. Their scale, established market presence, technological
capabilities, and integration with global supply chains have enabled them to
leverage scheme incentives effectively and contribute significantly to overall
outcomes. Performance assessments indicate that Group A firms account for
approximately 61% of the total value of production achieved under the scheme.
(iv) Mid-sized firms (Group B) have exhibited steady and consistent growth across
key performance indicators. Sales and exports have increased at a moderate but
stable pace, while employment generation has remained positive throughout
the implementation period. Although their performance is comparatively
lower than that of large firms, the observed trends suggest that the scheme
has effectively supported their gradual expansion and capacity enhancement.
(v) Micro, Small and Medium Enterprises (MSMEs) under Group C have demonstrated
relatively moderate growth in sales, production, and employment. While their
contribution to overall output remains lower than that of larger firms, the
scheme has nonetheless facilitated investment and business expansion within
this segment.
(vi) Export performance has improved overall; however, the gains have been
uneven across firm categories. While larger firms have recorded substantial
export growth, mid-sized firms and MSMEs have relatively modest growth.

37Impact Assessment of PLI Schemes
(vii) The scheme has been significantly successful in the pharmaceutical sector.
However, the sector received a significant boost because of the COVID
pandemic. Anecdotal evidence and industry interactions inform us that, while
the industry might have grown on its own, the PLI scheme boosted the industry
confidence significantly.

38 Impact Assessment of PLI Schemes
The Production Linked Incentive
Scheme for IT Hardware 2.0
5.

39Impact Assessment of PLI Schemes
5.1 PLI Scheme on IT Hardware 2.0
5.1.1 Overview
The Production Linked Incentive (PLI) Scheme for IT Hardware 2.0, introduced by
the Ministry of Electronics and Information Technology (MeitY), aims to strengthen
domestic manufacturing of key IT hardware products such as laptops, tablets,
servers, all-in-one PCs, and ultra-small form factor devices. With a total outlay
of
₹17,000 crore over a six-year period, the scheme builds upon the earlier PLI
scheme notified in 2021, incorporating industry feedback and expanding its scope.
A total of 27 applicants has been approved under the revised scheme, including
several firms that transitioned from the earlier version through restructuring at the
group level.
The scheme provides flexibility to firms in terms of the commencement of
production, allowing them to begin operations in different years between 2023
and 2025. This flexibility reflects the recognition of varying gestation periods
across firms. However, as of March 2026, PLI incentives amounting to `98.00
crore has been disbursed, indicating that the scheme is still in the early stages of
implementation. While around 18 firms have reported production and a smaller
subset has reported exports, the limited coverage and evolving participation make
it difficult to draw firm conclusions about overall performance.
Performance trends show a transitional pattern influenced by the shift from the
earlier scheme to PLI 2.0. Investment trends under the scheme appear modest
but improving. While cumulative investment prior to 2024–25 achieved only about
one-third of the targets, more recent data suggest that approximately half of the
annual targets are being met, although these targets vary significantly across years.
Employment generation has shown moderate growth, with a noticeable increase in
reported labour figures.
The PLI Scheme for IT Hardware 2.0 appears to be progressing gradually, with early
signs of improvement in production, investment, and employment. The scheme
has contributed to additional investment and production beyond natural trends,
although the impact is still emerging and uneven across firms. Given its recent
implementation and the presence of a gestation phase, a more comprehensive
evaluation will require additional time, broader participation, and more complete
data to fully assess its effectiveness in achieving its objectives.
5.1.2 Implementation Strategy
PLI 1.0 for IT Hardware offered companies 1-4% incentives on incremental sales
over a 2019–20 base year. However, high entry thresholds and rigid conditions
prompted a redesign. PLI 2.0, notified in May 2023 with a
₹17,000 crore outlay,
retained this core administrative structure but introduced key changes. Companies
gained flexibility to spread investment across the six-year tenure rather than meet
fixed annual targets, with shortfalls causing proportional incentive cuts rather than

40 Impact Assessment of PLI Schemes
disqualification. A migration provision let PLI 1.0 approved companies continue,
migrate to 2.0 carrying forward prior investment, or reapply as fresh applicants.
5.1.3 Performance Analysis
The performance of the PLI scheme for IT Hardware needs to be assessed in
the context of the transition from the original scheme to PLI 2.0. As of March
2026, only four companies had received PLI incentives, amounting to
₹98 crore,
while around 18 companies reported production and only four reported exports.
Although reported employment has increased significantly, this partly reflects the
rise in the number of companies reporting data, making it difficult to assess the
extent of underlying employment growth.
Production declined sharply after 2022, with Fy 2023–24 reflecting a transition
period following the introduction of PLI 2.0 in May 2023. Under the earlier scheme,
production levels in Fy 2022–23 were relatively high; subsequently, 13 of the 14
applicants under the original scheme migrated to PLI 2.0, and most opted for a
gestation period in the first year of the new scheme. This contributed to the decline
in reported production in Fy 2023–24. Production subsequently recovered in Fy
2024–25 as 25 of the 27 approved applicants commenced participation under PLI
2.0.
Investment performance has so far been moderate, although there are indications
of improvement, with recent achievement levels approaching half of the applicable
annual targets compared with lower achievement under the earlier phase.
Employment has also increased, although the rise is partly associated with the
growing number of firms reporting data, making it difficult to isolate the underlying
employment impact. Export performance remains particularly difficult to assess
because of limited reporting by participating firms
Overall, PLI 2.0 for IT Hardware appears to be progressing gradually, with
improvements in production, investment and employment as more firms enter the
operational phase; however, its broader impact on manufacturing scale, exports
and domestic value addition will become clearer only as firms move beyond
the gestation period and more consistent firm-level performance data become
available. The available evidence suggests that the scheme is still in a phase of
expansion and transition, and its performance should therefore be assessed over a
longer period as participating firms move beyond the gestation phase and begin
to scale up production.
5.1.4 Evaluation Matrix for Analysing Impact assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focus on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?

41Impact Assessment of PLI Schemes
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:
Parameters Impact
Investments –
`908 crore
 
Production – `21,853 crore  
Exports  
Employment Generation (in Nos.) – 4,859  
*cumulative till March 26
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable
5.1.5 Key Insights:
(i) PLI for IT Hardware represents an important step towards establishing
India as a manufacturing location for global IT Hardware companies. Its
broader significance lies in catalysing the expansion of India’s electronics
manufacturing ecosystem beyond mobile phones and into a wider range of
digital technologies.
(ii) IT Hardware 1.0 scheme did not achieve the intended outcomes, primarily due
to certain design limitations:
a) Low Incentive Rates: The financial incentives offered under the scheme
were considered inadequate to encourage firms to relocate large-scale
supply chains and manufacturing operations to India. Incentives ranged
from 1% to 4%, with an average incentive rate of only about 2%.
b) Stringent Localisation Requirements: The scheme prescribed strict
domestic value-addition targets. Given that India’s ecosystem for critical
IT hardware components such as bare PCBs, memory modules, and
display panels was still at a nascent stage, many beneficiary companies
found it difficult to meet the prescribed localisation and manufacturing
thresholds.
(iii) Drawing on the lessons from IT Hardware 1.0, the Government launched the IT
Hardware 2.0 Scheme in 2023 by subsuming the earlier scheme into a revised
framework. The scheme has a total outlay of
₹17,000 crore and covers five
product categories: (i) laptops, (ii) tablets, (iii) all-in-one PCs, (iv) servers, and
(v) ultra-small form factor (USFF) devices.

42 Impact Assessment of PLI Schemes
(iv) The transition from IT Hardware 1.0 to IT Hardware 2.0 resulted in a loss
of valuable time and temporarily slowed the momentum of domestic
manufacturing in the sector. Nevertheless, the revised scheme incorporates
several design improvements aimed at enhancing industry participation and
improving overall effectiveness.
(v) IT Hardware 2.0 provides an average incentive of approximately 5%. In
addition, it offers incremental incentives linked to the Localisation of selected
components. This flexible approach enables firms to avail incentives in line
with their manufacturing capabilities and Localisation plans, thereby making
the scheme more attractive to industry participants.
(vi) The scheme also provides flexibility regarding the commencement of
production, allowing approved firms to begin operations between 2023 and
2025. This provision recognises the differing investment cycles and gestation
periods across firms and product segments.

43Impact Assessment of PLI Schemes
The Production Linked Incentive
Scheme for Promoting Telecom &
Networking Products
6.

44 Impact Assessment of PLI Schemes
6.1 PLI Scheme on Telecom & Networking Products
6.1.1 Overview
The Production Linked Incentive (PLI) Scheme for the telecom sector is designed
to strengthen India’s manufacturing ecosystem by boosting domestic production,
attracting investment, increasing exports, and generating employment. With a total
outlay of
₹12,195 crore, the scheme targets both MSMEs and non-MSMEs, with the
latter further classified into domestic and global firms. A dedicated allocation of

₹
1000 crore has been reserved for MSMEs, reflecting the policy’s intent to promote
inclusive growth alongside large-scale industrial expansion.
The scheme came into effect from 1
st
April, 2021 for a period of 5 years. Support
under the Scheme is provided to companies who manufacture specified telecom
and networking products in following 4 product categories in India:
(i) Core transmission Equipment
(ii) 4G/5G, Next Generation RAN and Wireless Equipment
(iii) Access & CPE, IoT Access Devices and Other Wireless Equipment
(iv) Enterprise Equipment: Switch and Router
The structure of beneficiaries highlights a diverse participation base, with firms
distributed across MSMEs, domestic non-MSMEs, and global companies. However,
the disbursement of incentives is relatively concentrated, with non-MSME domestic
and global firms receiving a significantly larger share of total PLI funds compared
to MSMEs. This suggests that while smaller firms are actively participating, larger
firms continue to play a dominant role in leveraging scheme incentives and scaling
operations.
Table 6.1: Fund Disbursement
S.No. Segments
Total Number of
Applicants
No. of Firms who
received PLI
Amount of PLI
received (
₹crore) *
1.MSME 28 10 114.49
2.Non MSME Domestic 8 6 791.02
3.Non MSME Global 6 5 664.59
TOTAL 42 21 1570.10
* Cumulative till FY March 2024–25
In terms of performance, the telecom sector demonstrates strong and encouraging trends across key indicators. Sales have shown consistent growth over the period from 2022–23 to 2024–25, with particularly strong expansion among domestic firms. MSMEs also exhibit steady and broad-based growth, even after accounting for the influence of a few large players, indicating that gains are not overly concentrated. While global firms show some volatility – with sales peaking

45Impact Assessment of PLI Schemes
in 2023–24 before moderating in 2024–25, the overall trajectory suggests a
strengthening domestic manufacturing base, increasingly driven by domestic
and MSME firms. Export performance mirrors this positive trend, albeit with some
short-term fluctuations. Employment trends broadly align with movements in sales
and exports. Investment trends, meanwhile, show strong growth up to 2023–24,
followed by some moderation in 2024–25, possibly indicating a transition from
capital expenditure to operational consolidation.
Despite these positive developments, import dependence remains a key structural
concern. Evidence suggests that India’s role in global value chains, particularly
in electronics and telecom manufacturing, continues to be concentrated in final
assembly rather than high-value component production. Structural challenges
such as limited economies of scale, gaps in advanced technological capabilities,
and constraints in skilled labour availability contribute to continued reliance on
imported components. As a result, while India has made progress as an assembly
hub, deeper manufacturing capabilities remain underdeveloped.
Overall, the PLI scheme for telecom appears to have successfully stimulated
additional investment, increased production, and generated employment beyond
natural trends, while also enhancing export potential. However, the persistence of
structural constraints highlights the need for complementary policy measures to
deepen domestic value addition and reduce import dependence.
6.1.2 Implementation Strategy
The PLI Scheme for Telecom and Networking Products is implemented through
a competitive, performance-linked incentive mechanism, under which eligible
companies receive financial incentives based on their incremental sales of products
manufactured in India, subject to prescribed eligibility, investment and performance
criteria. Selected beneficiaries are required to meet specified thresholds for
investment, incremental sales and other performance parameters during the
tenure of the scheme. The scheme also provides differentiated support to MSMEs,
domestic companies and global companies, with the objective of encouraging both
indigenous manufacturing capabilities and large-scale investment in the telecom
equipment ecosystem.
The design-led manufacturing incentive under India’s Production-Linked Incentive
(PLI) Scheme for Telecom and Networking Products provides an additional 1%
financial incentive over standard rates for products designed, developed, and
manufactured domestically.
6.1.3 Performance Analysis
(i) MSMEs
MSME firms have demonstrated a broadly positive performance trajectory over
the review period. Sales have shown a steady upward trend from 2022–23 to

46 Impact Assessment of PLI Schemes
2024–25, and the growth remains significant even after excluding the two major
driver firms, indicating that the improvement is relatively broad-based rather
than being concentrated among a small number of large performers. Export
performance also reflects a similar pattern, with a temporary moderation in
2023 followed by a strong recovery in 2024, suggesting renewed momentum in
overseas markets. Employment trends broadly mirror the movements observed
in sales and exports, with a decline in 2023–24 followed by improvement in
2024–25. While investment performance was strong up to FY 2023–24, a
moderation was observed in FY 2024–25. Overall, the performance of MSMEs
indicates a strengthening manufacturing and market presence. Refer Graphs
E.2, E.7 and the relevant employment and investment graphs in the Appendix.
(ii) Domestic Firms
Domestic firms recorded the strongest expansion in sales among all categories,
with a particularly sharp increase in 2024–25, indicating significant scaling up of
manufacturing and business operations. Their export performance experienced
a decline in 2023, in line with the broader sectoral trend, but recovered strongly
in 2024, contributing substantially to the overall improvement in telecom
exports. Employment trends broadly followed the same pattern as sales and
exports, with a moderation in 2023–24 followed by an improvement in 2024–
25, suggesting that the recovery in output was accompanied by an expansion
in employment. Investment by domestic firms remained strong through FY
2023–24, although the moderation observed in FY 2024–25 may indicate a
slowdown in the pace of capacity expansion. Overall, domestic firms appear to
be the principal drivers of the recent growth momentum in the telecom sector,
particularly in terms of sales and exports.
(iii) Global Firms
Global firms also contributed significantly to the overall performance of the
telecom sector, although their growth pattern appears relatively more volatile.
Sales increased up to 2023–24 before declining in 2024–25, in contrast to
the continued expansion observed among MSMEs and domestic firms. Export
performance similarly witnessed a sector-wide moderation in 2023, followed
by a strong recovery in 2024, with global firms remaining among the major
contributors to telecom exports. Employment performance broadly moved
in line with sales and export trends, reflecting the decline in 2023–24 and
subsequent improvement in 2024–25. Investment performance remained
strong through FY 2023–24 but moderated in FY 2024–25, consistent with the
overall investment trend across the scheme. Taken together, the performance of
global firms indicates their continued importance in the telecom manufacturing
and export ecosystem, while the decline in sales and moderation in investment
in the latest year suggest the need to closely monitor the sustainability of their
growth momentum.

47Impact Assessment of PLI Schemes
6.1.4 Evaluation Matrix for Analysing Impact assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focus on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:
Parameters Impact
Investments – ` 5,278 crore 
Production – `1,10, 016  
Exports  
Employment Generation (in Nos.)– 33,610  
(Cumulative till March 2026)
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Blue-Data unavailable
6.1.5 Key Insights:
(i) The Telecom PLI has strengthened India’s domestic manufacturing capability
in telecom and networking products. It has supported the development of
indigenous 4G technology and strengthened domestic manufacturing capability
for 5G telecom equipment, marking an important expansion of India’s capabilities
in a strategically significant technology sector. Between Fy 21 and Fy 25, India’s
telecom exports rose by 1.5% average annual growth rate (AAGR), while imports
concurrently declined by 18.5% AAGR. This represents an important expansion
of domestic manufacturing in a strategically significant technology sector. More
broadly, PLI has catalysed investment, production, and technology capability
in the telecom manufacturing ecosystem, strengthening India’s position in an
increasingly strategic global industry.
(ii) This scheme has a unique feature of incentivising design -led manufacturing. An
additional 1% incentive for products designed, developed, and manufactured in
India has been included in this scheme to promote design-led manufacturing.

48 Impact Assessment of PLI Schemes
In this particular sector, where, net exports are usually negative, with imports
exceeding exports, this sort of an inclusion in the scheme provides the impetus
for domestic manufacturing and scaling up.
(iii) Volume of sales for both the categories MSMEs and non-MSMEs have witnessed
growth over the scheme period so far. Exports have also grown with some
short-term fluctuations. Job creation in the sector is closely linked to output
performance and demand conditions. A crucial contribution of this scheme
has been manufacturing of 4G/5G equipment’s in India by companies like
Nokia, Ericsson and Cisco.
(iv) While this sector seems promising, few caveats need to be pointed out. The
scheme does not stipulate domestic value addition. As a result, beneficiaries
may import up to 100% of the components, assemble them, and still qualify
for the Production-Linked Incentive (PLI) benefits. This limits the scheme’s
contribution to technological self-reliance. While manufacturing capacity
has strengthened, the scheme may not substantially reduce technological
dependence on foreign vendors in the near future. That said, one would hope
that assembly is only a beginning, and over time even technology transfers
would happen. However, it is to be noted that import substitution has been a
key factor. Evidence suggests that there has been reduction in imports.

The Production Linked Incentive
Scheme for Automobile and Auto
Components
7.

50 Impact Assessment of PLI Schemes
7.1 PLI Scheme on Automobile & Auto Components
7.1.1 Overview
The Production Linked Incentive (PLI) Scheme for Automobiles and Auto
Components is a major policy initiative aimed at boosting domestic manufacturing
of advanced automotive technologies and attracting investments across the
automotive value chain. With a substantial outlay of
₹25938 crore, the scheme
focuses on promoting next-generation mobility solutions, particularly electric
and hydrogen-based vehicles, through two key components: the Champion OEM
Incentive Scheme and the Component Champion Incentive Scheme. While the
former incentivises vehicle manufacturers based on sales of advanced automotive
technologies, the latter supports component manufacturers in strengthening the
supply ecosystem.
The implementation of the scheme has seen participation from leading automotive
firms, including Tata Motors, Bajaj Auto, Mahindra & Mahindra, TVS Motor, and Ola
Electric, among others. Incentive disbursement has increased significantly over
time, rising from
₹322 crore in Fy 2024–25 to nearly ₹2000 crore in Fy 2025–26,
indicating a gradual scaling up of scheme benefits. Additionally, a number of firms
have received Domestic Value Addition (DVA) certification, reflecting progress
toward Localisation and strengthening of domestic manufacturing capabilities.
Sr. No.Name of Applicant Category
Incentive
Disbursed in FY
2024–25
Incentive
Disbursed in FY
2025–26
1 Tata Motors Ltd. OEM 142.13 403.18
2 Bajaj Auto Ltd. OEM - 625.65
3 Mahindra & Mahindra Ltd. OEM 104.08 283.82
4 TVS Motor Co. OEM - 320.51
5 Ola Electric Tech OEM 73.74 366.78
6
Toyota Kirloskar Auto Parts
Pvt. Ltd.
Component 2.05 -
The scheme is sub-divided into the following categories
(i) Champion OEM Incentive Scheme
(ii) Component Champion Incentive Scheme
The Champion OEM Incentive scheme is a ‘sales value linked’ scheme,
applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles
of all segments – 2 wheelers, 3 wheelers, passenger vehicles, commercial
vehicles, Tractors, Automobile meant for Military use and any other Advanced
Automotive Technology vehicle as prescribed by MHI depending upon
technical developments.

51Impact Assessment of PLI Schemes
PLI – Auto Sales (in terms of units of vehicle production)
Category of Vehicle
Units Incentivised
(Sales for FY
2023–24)
Units Incentivised
(Sales for FY
2024–25)
Total Units
Incentivised
e-2w 41758 1000414 1042172
e-3w 23486 214899 238385
e-4w 11314 68226 79540
e-bus 280 1111 1391
Total 76838 1284650 1361488
In terms of performance, the scheme has led to a substantial increase in production,
particularly in electric vehicles across segments such as two-wheelers, three-
wheelers, passenger vehicles, and buses. The number of incentivised units has
grown sharply, especially between Fy 2023–24 and Fy 2024–25, suggesting that
firms are scaling up production in response to policy support. However, due to the
cumulative nature of the data, it remains difficult to precisely isolate the scheme’s
contribution from broader industry trends.
Investment performance under the scheme has been strong, with cumulative
investments reaching
₹44,326 crore by March 2026, against projected ₹42,500
crore. This indicates that the scheme has successfully stimulated additional
investment beyond natural trends, particularly evident in Fy 2024–25 where
targets were surpassed. However, the translation of this investment into production
outcomes appears uneven. While production has increased and exceeded 50%
of targets in Fy 2024–25, performance in Fy 2025–26 shows some moderation,
suggesting that gains are still stabilising.
Employment generation presents a more subdued picture. Although cumulative
employment stands at 67,820, this remains significantly below the projected target
of over 1.48 lakh jobs, indicating that the scheme has not yet led to employment
growth beyond natural trends, but the picture can change duly as the scheme
progresses. Similarly, export performance cannot be assessed due to the absence
of relevant data, limiting the evaluation of the scheme’s impact on global
competitiveness.
When viewed in the context of overall industry trends, the automobile sector
exhibits a cyclical pattern, with a pandemic-induced contraction followed by
a strong recovery and subsequent stabilization. While the trends under the PLI
scheme appear broadly aligned with this recovery phase, the limited availability
of disaggregated data makes it difficult to establish a clear causal relationship
between the scheme and industry-wide performance.
Overall, the PLI scheme for automobiles and auto components demonstrates
positive outcomes in terms of investment and production, particularly in the

52 Impact Assessment of PLI Schemes
emerging electric mobility segment. As the scheme progresses, a clearer picture
of its effectiveness will emerge with more granular data and a longer time horizon.
7.1.2 Implementation Strategy
The PLI Scheme for Automobile and Auto Components is implemented through
a performance-linked incentive mechanism administered by the Ministry of Heavy
Industries (MHI), under which selected companies are required to undertake
prescribed investments and establish or expand domestic manufacturing capacity
for Advanced Automotive Technology (AAT) vehicles and components. Incentives
are provided based on the achievement of specified performance parameters,
particularly incremental sales of eligible products, subject to meeting the prescribed
investment, domestic value addition and other eligibility conditions.
7.1.3 Performance Analysis
The Champion OEM Incentive Scheme is a sales value-linked incentive scheme
covering Battery Electric Vehicles (BEVs) and Hydrogen Fuel Cell Vehicles across
a range of segments, including two-wheelers, three-wheelers, passenger vehicles,
commercial vehicles, tractors and military-use automobiles. Major firms participating
in the scheme include Tata Motors Ltd., Bajaj Auto Ltd., Mahindra & Mahindra Ltd.,
TVS Motor Co. and Ola Electric Technologies Pvt. Ltd. The scheme has witnessed
a gradual scaling up of implementation, with incentive disbursements increasing
substantially from
₹322 crore in Fy 2024–25 to nearly ₹2,000 crore in Fy 2025–26.
Production performance has been particularly encouraging in the electric mobility
segment. Total incentivised production increased sharply from 76,838 units in Fy
2023–24 to 13,61,488 cumulative units, with e-2W and e-3W segments accounting
for a significant share of the increase. Progress has also been made in establishing
domestic value addition, with eight applicants under the Champion OEM category
receiving DVA certification covering 94 variants, while 10 applicants under the
Component Champion category received certification for 37 variants. Investment
performance has also been strong, indicating that the scheme is supporting
capacity creation and expansion in the domestic automotive ecosystem.
However, the production and investment gains have not yet translated fully into
incremental sales. Incremental sales currently stand at
₹52,414 crore against the
projected
₹2,31,500 crore, suggesting that production capacities are still being
scaled up and market realisation of the investments may require more time.
Employment generation also remains relatively modest, indicating that the
employment impact of the scheme has so far been limited. Further, the contribution
of the scheme to export competitiveness cannot yet be assessed adequately due
to the absence of sufficiently disaggregated export-related data.
The performance of the scheme also needs to be viewed against the broader
trajectory of the automobile industry, which has experienced a cycle of pandemic-
induced contraction, subsequent strong recovery and more recent moderation

53Impact Assessment of PLI Schemes
in growth. The trends observed under the PLI scheme appear broadly consistent
with this recovery, although the limited availability of disaggregated data makes it
difficult to establish a direct causal relationship between the scheme and industry-
wide performance.
Overall, the scheme has demonstrated positive outcomes in terms of investment,
capacity creation and production, particularly in electric mobility. However,
employment generation, incremental sales realisation and export competitiveness
require continued monitoring before the full impact of the scheme can be assessed.
7.1.4 Industry Performance: A Comprehensive Overview
The overall automobile industry data shows a clear cyclical pattern shaped by both
external shocks and subsequent recovery. After recording positive growth in 2018–
19, the sector experienced a sharp contraction in 2019–20 and 2020–21, reflecting
broader economic slowdown and the impact of the pandemic. This was followed
by a strong rebound in 2021–22 and 2022–23, with sales growing by 32.88% and
31.15% respectively, driven by pent-up demand, easing supply constraints, and
price effects. Growth moderates thereafter, with increases of 11.73% in 2023–24
and 5.78% in 2024–25, indicating a gradual normalisation of demand conditions.
Overall, the trend suggests a classic downturn-recovery-stabilization cycle, and
while it appears broadly aligned with trends observed under the PLI scheme,
limited data makes it difficult to establish a direct causal relationship.
Income & Expenditure Summary: Automobiles & Ancillaries Industry (` Crore)
Years 2018-19 2019–20 2020–21 2021–22 2022–23 2023–24 2024–25
Total
income
1072470.17950914.35923535.141240999.421582388.281760453.211851699.64
Sales1036977.56912213.45873402.861179667.881548694.801711973.851803420.94
Source CMIE Industry Outlook
7.1.5 Evaluation Matrix for Analysing Impact assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focus on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment

54 Impact Assessment of PLI Schemes
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:
Parameters Impact
Investments – R 44,326 crore 
Production – R 52,414 crore  
Exports  
Employment Generation (in Nos.) – 67,820  
(Cumulative till March 2026)
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable
Production values have fallen in 2025–26 based on the data that is available, but
still are over 50% of the targets. Export for some categories have increased more
than the others.
Table 9.3: PLI – Auto Parameters
Parameter
Projected for 5 Years
(Cabinet Projection)
Actual (Cumulative)
till March 2026
Investment `42500 crore `44326 crore
Incremental Sales
(Base Year Fy 2019–20)
`231500 crore `52414 crore
Employment 148147 67820
Incentive Disbursement `25938 crore ` 2386.36 crore
Comments
a) Over the two years of available sales data, a significant increase in
production has been observed.
b) Given the cumulative nature of the furnished data, it is difficult to draw
definitive conclusions about the precise state of the industry or the extent
of progress under the PLI Scheme.
7.1.6 Key Insights:
(i) The Automobile and Auto Components PLI is helping India build manufacturing
capacity in Advanced Automotive Technologies. India’s established automotive

55Impact Assessment of PLI Schemes
manufacturing ecosystem is transitioning towards electric mobility and
advanced technologies. In vehicles, total exports rose by 33.2%, from USD
18,897.2 million in 2021 to USD 25,162.7 million in 2025. The role of PLI in this
established sector lies in accelerating investment and capacity creation in
technologies that will shape the next phase of India’s automotive growth.
(ii) The scheme mandates a DVA of 50% to claim incentives under the scheme. The
auto companies and component makers are required to calculate and present
the DVA across their supply chain and present these details to the testing
agencies. While domestic value addition component has been mandated to
boost domestic manufacturing of components, however, the stringent norms
make compliance difficult for the beneficiary companies domestic ecosystem
for EV components and advanced automated technology are still developing
in the country.
(iii) The scheme’s eligibility criteria involve high investment thresholds, significant
turnover requirements and advanced technology capabilities. These
requirements favour large manufacturers. The scheme has resulted in increase
in EV production across 2-wheelers, 3-wheelers, passenger vehicles, and buses.
Investment has been steady over the years. However, grounding of investment
in value of production terms has been irregular.
(iv) This scheme is different from the other schemes, as it has not earmarked any
beneficiary company for availing incentives under the scheme The scheme
takes an ‘open to all’ approach in which any company can claim incentive
for their production subject to threshold investment that has been specified
during the commencement of the scheme.
(v) The auto components industry has been going through a lot of technological
transformation. While in the recent times, electric vehicles have dominated the
discussion, the internal combustion engine continues to have utility and may
survive in the short to medium run. Overall, the PLI scheme for automobiles and
auto components demonstrates favourable outcomes in terms of investment
and production, particularly in the emerging electric mobility segment.

The Production Linked Incentive
Scheme Advanced Chemistry Cell
(ACC) Battery
8.

57Impact Assessment of PLI Schemes
8.1 PLI Scheme on ACC Batteries
8.1.1 Overview
The Production Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC)
batteries is a strategic initiative aimed at building domestic manufacturing capacity
for energy storage technologies, with a targeted cumulative capacity of 50 GWh
for ACCs and an additional 5 GWh for niche technologies. Backed by a substantial
outlay of `18100 crore, the scheme is intended to support India’s transition toward
clean energy and strengthen its position in emerging battery value chains.
However, the scheme is currently in its early gestation phase, and progress has
been slower than anticipated. As of now, only about 1.4 GWh of capacity has been
developed against the targeted 50 GWh, and commercial production has not yet
commenced. Most beneficiary firms remain focused on infrastructure development
and capacity creation, which explains the absence of reported production and
incentive disbursement so far. While some delays are expected given the capital-
intensive and technologically complex nature of the sector, the extent of the lag
has raised concerns about the scheme’s performance.
A range of structural and implementation challenges underpin this slowdown.
India’s limited domestic capabilities in advanced battery technology have led to
continued dependence on foreign expertise and technology transfers. At the same
time, the absence of a robust upstream ecosystem made Localisation difficult to
achieve. This dependence is made stronger by reliance on imported machinery,
delays in project execution, and shortages of skilled manpower required for such
a specialised sector.
8.1.2 Implementation Strategy
The Scheme is implemented through a competitive bidding mechanism designed
to support the establishment of large-scale domestic ACC manufacturing capacity.
Under the scheme, eligible manufacturers are selected through a transparent
bidding process based on parameters such as the proposed manufacturing
capacity, investment commitments, and the extent of domestic value addition.
Selected manufacturers are required to establish gigafactory-scale production
facilities in India and progressively increase domestic value addition by developing
capabilities across the battery value chain. Financial incentives are linked to the
actual production and sale of ACC batteries and are provided over a defined period,
subject to manufacturers meeting prescribed thresholds relating to investment,
manufacturing capacity, production and domestic value addition.
8.1.3 Performance Analysis
In the current scenario, there is growing concern around the performance of the
ACC Battery PLI Scheme. The scheme is constrained by India’s limited domestic
technological capabilities in advanced battery manufacturing, with continued
reliance on foreign technology and expertise. At the same time, particularly for

58 Impact Assessment of PLI Schemes
critical components such as cathodes, anodes, and key minerals like lithium and
cobalt, a well-developed upstream ecosystem is absent. This has made it difficult
to achieve Localisation targets.
Further, domestic value addition requirements (In PLI ACC scheme, the beneficiary
firms are required to achieve a minimum of 25% DVA by end of 2nd Year and 60%
by the end of 5th Year of the scheme.) appear misaligned with India’s current
industrial base, leading to delays in capacity creation. Only 1.4 GWh of capacity
has been built out of the expected 50 GWh; the delay reflects the capital-intensive
nature of the sector and the targeted capacity is expected to be achieved at a
later date. Beyond the general dependence on foreign technology and expertise,
the upstream ecosystem for critical components such as cathodes, anodes and
key minerals like lithium and cobalt remains underdeveloped, making Localisation
difficult.
Weak execution is reflected in the limited capacity addition so far and the lack
of incentive disbursement, while slower-than-expected growth in electric vehicle
demand has also dampened the pace of investment. Together, these factors
suggest that the scheme’s lag is not merely cyclical but rooted in deeper structural
constraints.
8.1.4 Evaluation Matrix for Analysing Impact assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focus on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:
Parameters Impact
Investments – R 4,570 crore
Production yet to
commence
Production
Exports
Employment Generation (in Nos.) – 1,245
(Cumulative till March 2026)

59Impact Assessment of PLI Schemes
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable
8.1.5 Key Insights:
a) The ACC PLI is creating domestic capacity in advanced battery
technologies that are critical for electric mobility and energy storage. The
initiative is laying the foundation for a domestic battery manufacturing
ecosystem to support India’s clean-energy transition. More significantly,
PLI is catalysing the emergence of a strategic manufacturing sector that
was previously limited in India’s industrial landscape and is expected to
become increasingly important with the growth of electric mobility and
energy storage.
b) Owing to stringent domestic value addition norms, strict timelines and
shorter gestation period, the scheme so far has not performed as per
expectation. There has also been an operational issue, with one of the
beneficiary companies been disqualified due to suppression of material
facts. ACC battery is at nascent stage of development in the country, so,
a substantial technology gap exists due to limited domestic technological
capabilities. This industry is also susceptible to risks in the form of
availability of rare earth minerals. In the last few months, some of the
firms have made significant investments in battery technologies. Like
many other sectors, investment in this technology is likely to have a long
gestation period. Therefore, while the outlook is positive, actual impact
can only be felt over time.

60 Impact Assessment of PLI Schemes
The Production Linked Incentive
Scheme for Drones & Drone
Components
9.

61Impact Assessment of PLI Schemes
9.1 PLI Scheme on Drones & Drone Components
9.1.1 Overview
The Production Linked Incentive (PLI) Scheme for drones has been introduced
with the objective of promoting domestic manufacturing of drones and their
components, with the broader aim of making India self-sufficient and globally
competitive in this emerging sector. With a relatively modest outlay of
₹120 crore,
the scheme targets a niche but high-potential industry that is expected to play a
critical role in future technological and industrial applications.
The implementation of the scheme shows encouraging progress, particularly in
terms of fund Utilisation and firm participation. Approximately
₹92.99 crore, or
77.5% of the total outlay, has already been disbursed, with 18 out of 23 approved
applicants receiving incentives. A significant share of the disbursement is
concentrated among a few leading firms, notably IdeaForge Technology Private
Limited, Raphe MPhibr Private Limited, and IoTechWorld Avigation Private Limited,
indicating the presence of dominant players driving growth in the sector.
Performance indicators suggest a strong and positive trajectory. Both cumulative
turnover and investment have shown consistent growth among participating
firms, reflecting increasing scale of operations and rising industry confidence. In
particular, 12 firms have reported steadily increasing turnover over the period from
2021 to 2023, pointing to sustained expansion in production and market demand.
The parallel growth in investment further indicates that firms are continuing to
build capacity and strengthen their manufacturing capabilities.
Employment trends cannot be meaningfully assessed, as only a single year of
employment data has been provided. Similarly, the absence of export data prevents
an analysis of the scheme’s effectiveness in enhancing global competitiveness.
The PLI scheme for drones appears to be performing well in its early stages,
demonstrating strong growth in investment and production. While data limitations
restrict a full assessment of employment and export outcomes, the scheme shows
promising signs of contributing to the development of a self-sustaining and
competitive domestic drone manufacturing ecosystem.
9.1.2 Implementation Strategy
The Production Linked Incentive (PLI) Scheme for Drones and Drone Components
was implemented over three financial years. Incentives under the scheme are
linked to domestic value addition. A minimum value addition of 40% of net sales
is specified as a condition of eligibility. To widen participation, the eligibility norm
for MSMEs and start-ups is kept at a nominal level of annual sales turnover of
₹2
crore for drone manufacturers and
₹50 lakh for drone-component manufacturers,
and the PLI for any single beneficiary is capped at 25% of the total annual outlay.

62 Impact Assessment of PLI Schemes
9.1.3 Performance Analysis
Overall, the data indicate a positive growth trajectory in both cumulative turnover
and cumulative investment for the applicant firms. 12 applicants have reported
positive and increasing turnovers in the years 2021, 2022 and 2023.
There has been a positive growth in both turnover and investments. Given the
limitations of data, it is not possible to comment on employment as the data shared
by the ministry has only 1 year of employment data. Export performance cannot
be assessed due to the absence of export-related data. Refer to Graph F.1 in the
appendix.
9.1.4 Industry Performance: A Comprehensive Overview
When viewed in the context of overall industry trends, the drone sector is an
emerging industry that had a minimal manufacturing presence in India prior to
the launch of the PLI Scheme. From a very low base, the industry has expanded
rapidly, growing from about USD 0.01 billion in Fy 2021 to approximately USD 0.38
billion in Fy 2026, reflecting a five-year compound annual growth rate of close to
100%. This steep trajectory, though partly a function of the small starting base, is
consistent with the scheme’s objective of catalysing a domestic manufacturing
ecosystem in a niche but strategically important sector.
Overall, the PLI scheme for drones and drone components demonstrates positive
early outcomes in terms of investment and production. While the limited availability
of disaggregated data on employment and exports makes it difficult to establish
a clear causal relationship between the scheme and industry-wide performance,
the available evidence points to promising progress in the development of a self-
sustaining and globally competitive domestic drone manufacturing ecosystem.
9.1.5 Evaluation Matrix for Analysing Impact Assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focuses on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:

63Impact Assessment of PLI Schemes
Parameters Impact
Investments –
₹595 Crore
Production –
₹1379 Crore
Exports
Employment Generation (in Nos.) – 2650
(Cumulative till March 2026)
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable
Investment has been steady under the scheme and has resulted in increased
production. Employment generation has also been good, though supported
by only a single year of data, and export performance could not be assessed
as no export data were shared.
9.1.6 Key Insights
(i) The Drone PLI is supporting the development of an indigenous drone
manufacturing and component ecosystem. Official data shows that the drone
sector has experienced rapid growth, with turnover increasing seven-fold
under the PLI Scheme. It is helping build domestic capabilities in a rapidly
growing sector with applications across agriculture, logistics, infrastructure,
and other emerging areas, creating the foundation for India to participate in
the global drone industry. The broader significance lies in its catalytic role in
creating momentum, investment, and manufacturing capability in an emerging
technology sector that previously had only a limited domestic industrial base.
(ii) The scheme has demonstrated strong early implementation, with
₹92.99 crore
(77.5%) of the outlay disbursed and 18 out of 23 approved applicants receiving
PLI incentives. The scheme targets a niche but high-potential industry with
significant future technological, industrial and strategic applications.

64 Impact Assessment of PLI Schemes
The Production Linked Incentive
Scheme for Textile Products: MMF
Segments & Technical Textiles
10.

65Impact Assessment of PLI Schemes
10.1 PLI Scheme on Textiles
10.1.1 Overview
The Production Linked Incentive (PLI) Scheme for Textiles is designed to promote
the production of man-made fibre (MMF) apparel, fabrics, and technical textiles in
India, while enabling the industry to achieve scale, enhance competitiveness, and
generate employment. With a total outlay of
₹10,683 crore, the scheme focuses
on supporting greenfield investments and building a globally competitive textile
manufacturing base. However, given that the scheme commenced only in 2022–23
and projects are still in early stages of implementation, the available data remains
limited both in duration and coverage.
Table 10.1: Fund Disbursement
Year No. of PLI Recipients PLI Disbursed ( ₹crore) *
2024–25 2 40
2025–26 4 346
Total 6 386
*
Cumulative till FY March 25-26
The initial evidence suggests a mixed performance across key indicators such as sales, investment, exports, and employment. Among the subset of firms that have reported data consistently, sales exhibit a clear upward trend, indicating that operational firms are gradually scaling up production and improving market performance. Export performance among these firms also shows a rising trend, suggesting emerging competitiveness in external markets. However, this observation is based on a very small number of reporting firms, limiting the robustness of conclusions.
Investment trends present a more nuanced picture. While investment levels were
significantly below targets in the initial years, reaching only about 24 percent
of targets up to 2023–24, there is a noticeable improvement in 2024–25, with
investments rising to approximately 72 percent of the target. This pattern suggests
that firms may have front-loaded some capital expenditure earlier and are now
transitioning toward operational phases. Nevertheless, overall investment has yet
to fully meet the scheme’s targets, indicating that the scale of expansion is still
evolving.
Employment trends are difficult to assess due to data limitations. Since employment
data is reported on an “as on date” basis rather than cumulatively, consistent year-
on-year comparisons are not possible. While absolute employment numbers have
increased across reporting years, these figures are derived from a limited and
changing sample of firms, making it difficult to draw definitive conclusions about
employment generation attributable to the scheme.

66 Impact Assessment of PLI Schemes
Based on the available evidence, the scheme appears to have led to additional
investment only in the later phase while earlier years do not show a clear deviation
from natural trends. However, this investment has not yet translated into measurable
gains in production beyond the natural trend, nor has it resulted in a clear increase
in employment. Export performance remains inconclusive due to insufficient data.
Overall, while early signs of progress are visible in terms of sales growth and
improving investment trends, the limited data availability, low reporting rates, and
early stage of implementation make it difficult to draw firm conclusions about
the scheme’s effectiveness. A more reliable assessment would require sustained
reporting and a longer time horizon to capture the full impact of the policy.
10.1.2 Implementation Strategy
The strategy combines minimum investment thresholds with prescribed turnover/
performance requirements, thereby linking incentive support to actual capacity
creation and production outcomes rather than investment alone. Given the
greenfield nature of several projects, a gestation period has been provided to
facilitate establishment and operationalisation of manufacturing facilities.
10.1.3 Performance Analysis
Among the approved applicants, reporting continuity remains limited. Approximately
25% of the approved applicants reported both sales and investment for two
consecutive years, whereas fewer than 10% reported these variables consistently
for all three years. This indicates that while a subset of firms has been reporting
regularly, sustained and comprehensive reporting across the scheme participants
remains limited.
Among the firms that reported consistently across the years, sales show a clear upward
trend, suggesting expansion of operations and/or improvement in market performance
(refer Graph G.1 in the Appendix). In contrast, investment levels have declined over the
period, which may indicate that a significant portion of the initial capital expenditure
was undertaken during the earlier stages of project establishment and that firms
are subsequently focusing more on operationalisation and production rather than
undertaking fresh investment. Nevertheless, investment performance relative to the
prescribed targets has improved significantly. Up to FY 2023–24, reported investment
remained considerably below the targets, at around 24% of the targeted level, while
in FY 2024–25, investment increased to approximately 72% of the target, although
the prescribed targets were still not fully achieved (refer Graph G.4 in the Appendix).
Export performance among the consistently reporting firms also shows an
increasing trend, which is a positive indication of emerging competitiveness and
market penetration in international markets; however, this finding needs to be
interpreted cautiously as export data are available for only a small number of firms
(refer Graph G.2 in the Appendix).

67Impact Assessment of PLI Schemes
The assessment of employment generation remains constrained by the limited
availability of comparable data. While total employment reported for 2025–26
stood at approximately 33,427 comprising both direct and indirect employment,
comparable firm-level data for the preceding years are not available for the same
set of firms, thereby limiting the assessment of year-on-year growth and the pace
of employment generation. At the aggregate reporting level, 43 firms reported
employment of 3,937 in 2022–23, 36 firms reported 14,670 in 2023–24, and 33 firms
reported 24,163 in 2024–25. Some firms also reported zero employment. Given
the changing number of reporting firms and the relatively small subset of firms
reporting consistently across years, these employment figures should therefore
be interpreted with caution. The observed trends may reflect the performance of
relatively more active or better-established firms and may not necessarily represent
the performance of the entire universe of approved applicants.
Overall, the available evidence suggests improvement in sales and exports and a
significant acceleration in investment relative to targets in FY 2024–25, but the
limited continuity and coverage of firm-level reporting constrain the extent to
which these trends can be generalised to the scheme as a whole.
10.1.4 Evaluation Matrix for Analysing Impact assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focus on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:
Parameters Impact
Investments – R 8,117 crore
Production – R 11,241 crore
Exports
Employment Generation (in Nos.) – 33,427
(Cumulative till March 2026)

68 Impact Assessment of PLI Schemes
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable
10.1.5 Key Insights:
(i) Technical textiles have emerged as one of the important segments of India’s
manufacturing sector, particularly in high-value products such as medical and
hygiene textiles and mobiltech (automotive textiles). Imports declined by
49.4%, falling from USD 947.8 million in 2021 to USD 479.9 million in 2025.
Combined exports increased by 59%, rising from USD 611.6 million in 2021 to
USD 972.5 million in 2025. Investments in these areas have facilitated significant
domestic production capacity. The PLI is supporting India’s movement towards
higher-value and more technologically advanced textile segments, catalysing
investment and capacity creation in areas that are important for the future
diversification of India’s textile manufacturing base.
(ii) Initially, scheme has set high investment and turnover thresholds. Considering
most of the players in the textile sector are MSMEs, the investment and turnover
thresholds have been difficult for them to achieve. The target products have
been decided based on HSN codes. The HSN codes under the scheme have
been stringently mapped allowing little flexibility to beneficiary companies.
The scheme also emphasises on new company formation. This has adversely
affected the performance of schemes in its initial years. Subsequently,
additional HSN codes were added. Investment criterion has been lowered
down and clause for formation of new company has been abolished. Impact
of these changes may be visible in coming years.
(iii) Utilisation of the PLI funds in this sector is very limited (around 3.61% of
the allocated outlay). With the tariff debate seeming to reach a conclusion
with India in the countries with the least US tariff bracket, and several trade
agreements being signed with other geographies, things look promising for
the PLI associated with textiles.

70 Impact Assessment of PLI Schemes
The Production Linked Incentive
Scheme for White Goods (ACs and
LED Lights)
11.

71Impact Assessment of PLI Schemes
11.1 PLI Scheme on White Goods (ACs & LED Lights)
11.1.1 Overview
Having fincacial outlay of r 6238 crore, the Production Linked Incentive (PLI)
Scheme for White Goods is designed to strengthen domestic manufacturing
capabilities in key segments such as Air Conditioners (ACs) and LED products.
By linking incentives to incremental investment and sales, the scheme aims to
promote scale, enhance domestic value addition, and reduce import dependence.
With participation from 80 firms across these segments, it reflects a broad-based
effort to develop a competitive manufacturing ecosystem in India.
Beyond quantitative indicators, the scheme has led to important structural
improvements. Investments have been geographically diversified across 18 states,
47 districts, and 158 locations, contributing to wider industrial development.
The presence of both multinational and domestic firms, along with 26 MSME
participants, reflects a balanced industrial ecosystem. Notably, domestic value
addition has increased significantly from about 20% in Fy 2019–20 to 55% in Fy
2024–25, with expectations of reaching 75–80% in the coming years. This progress
is supported by the Localisation of critical components such as compressors, inner
grooved copper tubes, cross-flow fans, printed circuit board assemblies (PCBAs),
and motors, many of which were previously import-dependent.
Technological capability has also improved through strategic collaborations and
joint ventures. Partnerships involving global and domestic firms have enabled
technology transfer and facilitated the establishment of manufacturing capacity
for key components within India. These developments signal a shift toward deeper
integration of the domestic industry into higher-value segments of the supply
chain.
Despite these positive developments, the scheme is still ongoing, and the available
data are not sufficient to draw definitive conclusions about its long-term impact.
Additionally, export performance cannot be assessed, as export obligations are
not mandated under the scheme and corresponding data are not maintained.
Overall, the PLI scheme for White Goods shows strong early progress, with clear
evidence of increased investment, production, and employment beyond natural
trends. While cumulative reporting limits precise year-on-year analysis, the
consistent surpassing of threshold levels and improvements in value addition and
Localisation suggest that the scheme is effectively contributing to the development
of a more self-reliant and competitive manufacturing base in the white goods
sector.
11.1.2 Implementation Strategy
A central feature of the scheme is its structured incentive mechanism, which
requires firms to meet threshold investment and incremental sales targets relative

72 Impact Assessment of PLI Schemes
to a base year. Incentives are tied to net incremental sales rather than cumulative
output, ensuring that only additional production is rewarded. At the same time,
firms commit to cumulative investment and sales over the scheme period, which
forms the basis for monitoring overall progress.
11.1.3 Performance Analysis
In terms of performance, the available data suggest steady progress, though
interpretation requires caution due to the cumulative nature of reported figures
and the ongoing status of the scheme. As of March 2026, cumulative investment
has reached `6409 crore, while cumulative production stands at `43150 crore.
Employment generation has also been notable, with over 52700 jobs created.
While these outcomes remain below overall projections, they indicate meaningful
advancement in capacity creation and operationalisation. Incentive disbursement
has also increased over time, with
₹70.44 crore released in FY 2023–24 and ₹210
crore in FY 2024–25, and
₹300 Crore in FY 2025–26.
More detailed data indicate that both investment and sales have consistently
exceeded their respective threshold levels across reporting years, suggesting
that firms are not only meeting minimum eligibility conditions but also expanding
their scale of operations. Actual investment has risen steadily from
₹830 crore in
2021–22 to
₹6058 crore by September 2025. Similarly, reported sales increased
from
₹4157 crore in 2022–23 to ₹37467 crore over the same period. However, it
is important to note that the sales figures are cumulative in nature, reflecting the
aggregation of performance over time rather than year-on-year changes. As such,
while the trend indicates steady scaling of production, it should not be interpreted
as a direct annual increase in output.
Table 11.1: PLI – White Goods Parameters
FY (in Cr)
Threshold
Investment
Cumulative Actual
Investment
Threshold sales
Cumulative
Actual sales
2021–22 278 830 0 0
2022–23 942 1968 1428 4157
2023–24 992 3130 6250 13209
2024–25 2785 5367 11322 28352
2025–26 1626 6409 34078 43150
11.1.4 Industry Performance: A Comprehensive Overview
When viewed in the context of overall industry trends, the white goods sector, comprising air conditioners and LED products, has recorded steady long-term expansion. The industry grew from about USD 0.76 billion in Fy 2016 to approximately USD 3.48 billion in Fy 2024, registering a compound annual growth rate of around 31.5% in the pre-scheme period (Fy 2016–Fy 2020) and a five-year growth rate of about 16.5% thereafter. This sustained growth provides the backdrop against which the scheme’s structural contributions are best understood.

73Impact Assessment of PLI Schemes
11.1.5 Evaluation Matrix for Analysing Impact Assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focuses on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:
Parameters Impact
Investments – R 6,409 crore
Production – R 43,150 crore
Exports
Employment Generation (in Nos.)-52,703
(Cumulative till March 2026)
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable
While the Scheme guidelines impose no export obligation on participating
companies and export performance data is consequently not maintained, its
achievements remain substantial against the core objectives of import substitution,
value addition, and technological self-reliance. Investment has achieved
considerable geographical spread across 18 states, 47 districts, and 158 locations,
contributing to more balanced regional industrialization, while the Scheme has
fostered a diverse investor base comprising both multinational and domestic
companies, including 26 MSME applicants.
Most significantly, domestic value addition has risen sharply from 20 per cent in FY
2019–20 (the pre-PLI baseline) to 55 per cent in FY 2024–25, and is projected to
reach 75–80 per cent by FY 2027-28, a trajectory reflecting structural transformation
rather than incremental gain. This deepening is evident in the Localisation of critical,
technologically demanding components: hermetic compressors, Inner Grooved
Copper (IGT) tubes, cross-flow fans, PCBAs, and motors are now manufactured
domestically.

74 Impact Assessment of PLI Schemes
Compressor manufacturing capacity has grown ten-fold, from 1 million units in
2021 to 10 million units in 2025–26; IGT tube capacity, currently at 12,000 MT,
is projected to more than triple to 40,140 MT by 2026; cross-flow fans, wholly
imported in 2021, are now 80 per cent localised; and PCBAs, around 70 per cent
import-dependent in 2021, are now 90 per cent localised.
These outcomes have been underpinned by tangible technology transfer, indicating
that the Scheme’s impact extends beyond assembly-stage value addition to the
Localisation of core manufacturing capability itself. Illustrative examples include
the joint venture between Daikin India and Taiwan’s Rechi Precision for domestic
manufacture of rotary compressors, the establishment of a manufacturing
subsidiary by Mettube Malaysia for IGT tube production in India, and a further joint
venture between Mettube and Kutch Copper Limited for the same purpose.
Collectively, these developments suggest the Scheme has catalysed not merely
production scale-up, but a genuine transfer of process technology and component-
level manufacturing capability into the domestic ecosystem.
11.1.6 Key Insights
(i) PLI has significantly strengthened India’s domestic ecosystem for air-
conditioner and LED components and has helped in moving from assembly
to component manufacturing. Compressor manufacturing capacity increased
from 1 million units in 2021 to 10 million units in 2025–26, while domestic
manufacturing has expanded into components such as PCBAs and cross-flow
fans. The impact of PLI is particularly visible in the way investment has extended
beyond final-product manufacturing and contributed to the development of a
wider domestic supplier and component ecosystem.
(ii) Beyond headline growth, the scheme has led to important structural
improvements in the sector. Investments have been geographically diversified
across 18 states, 47 districts, and 158 locations, and the presence of
multinational and domestic firms alongside 26 MSME participants reflects a
balanced industrial ecosystem.
(iii) Domestic value addition and Localisation have improved significantly, with
key components such as compressors, copper tubes, PCBAs and motors
increasingly being manufactured domestically. Strategic collaborations
between global and domestic firms have also supported technology transfer
and capability building.
(iv) The scheme has contributed to reducing import dependence and strengthening
domestic supply chains, thereby supporting India’s transition towards a more
self-reliant and competitive white goods manufacturing ecosystem. However,
export performance cannot be assessed as export obligations are not mandated
under the scheme and corresponding export data are not maintained.

75Impact Assessment of PLI Schemes
(v) Overall, the scheme appears to be performing well, with strong progress in
investment, production, employment and Localisation. However, the relatively
low incentive disbursement of around
₹580 crore, compared with the scale of
investment and production, may warrant further assessment of the pace and
effectiveness of incentive disbursement.

The Production Linked Incentive
Scheme for High Efficiency Solar PV
Modules
12.

77Impact Assessment of PLI Schemes
12.1 PLI Scheme on High Efficiency Solar PV Modules
12.1.1 Overview
The Production Linked Incentive (PLI) Scheme for High Efficiency Solar PV Modules
is a key initiative aimed at strengthening India’s renewable energy manufacturing
base by promoting domestic production of high-efficiency solar modules. With
an outlay of
₹24,000 crore, the scheme seeks to build large-scale manufacturing
capacity, encourage the adoption of advanced technologies, promote integrated
production facilities, and reduce dependence on imports. A central feature of the
scheme is its emphasis on local value addition (LVA), with incentives increasing
as manufacturers source more components domestically, thereby fostering the
development of a complete solar manufacturing ecosystem within the country.
At present, the scheme is in its gestation phase, with most firms focused on
establishing production facilities and scaling up capacity. As a result, while some
segments have begun production, the scheme’s full impact is yet to materialise.
Investment trends, however, indicate strong progress. Cumulative investment
reached
₹26,469 crore up to 2023–24, with additional investments of ₹15,712 crore
in 2024–25 and total of
₹64,873 crore up to March 2026, reflecting sustained
capital inflow into the sector.
Employment generation has been more modest in comparison. While cumulative
employment stood at 5,990 up to 2023–24, it remained relatively stable at 5,936 in
2024–25 and was lower at 2,868 as of FY 2025-26. This pattern is consistent with
the early stage of the scheme, where capital-intensive capacity creation precedes
large-scale employment generation.
Significant progress has been achieved in terms of capacity expansion. India’s
solar PV module manufacturing capacity has increased from around 8 GW prior
to the scheme to nearly 116 GW. Of this, approximately 24 GW, about 20.7% is
directly attributable to PLI supported projects, indicating the scheme’s substantial
contribution to capacity augmentation.
12.1.2 Implementation Strategy
The scheme is currently in its gestation phase, with manufacturers in the process
of establishing their production facilities. PLI Scheme for High Efficiency Solar PV
Modules, the amount of PLI is linked to the local content in the solar PV modules
manufactured by the solar PV manufacturers selected under the Scheme. The PLI
amount increases with increased Local Value Addition (LVA), in order to encourage
manufacturers to source their material from the domestic market.
12.1.3 Performance Analysis
Investment under the scheme has been robust. As of March 2026, total investments
amount to approximately `64,873 crore. The Solar PV PLI Scheme has made strong
early progress in strengthening domestic solar manufacturing, with Local Value

78 Impact Assessment of PLI Schemes
Addition (LVA) serving as a key design feature. By linking incentives to higher
levels of domestic sourcing, the scheme seeks to encourage greater localisation of
components and the development of an integrated solar manufacturing ecosystem.
However, the assessment of the scheme needs to take into account the rapidly
changing global solar industry. A sharp decline in global module prices, driven
partly by excess manufacturing capacity and aggressive pricing by Chinese
producers, has created considerable pressure on manufacturers worldwide. At
the same time, fluctuations in international demand, supply-side constraints and
restrictions affecting the availability of critical materials have added uncertainty
to the operating environment. The continued dominance of China in global solar
supply chains further exposes the domestic industry to external supply and price
developments.
Overall, the Solar PV PLI Scheme demonstrates strong early outcomes in investment
mobilisation, manufacturing capacity creation, import substitution and export
expansion. At the same time, employment generation and production-related
outcomes are still evolving, given the relatively early stage of implementation and
the time required for new manufacturing facilities to reach full capacity utilisation.
The scheme appears to be making a meaningful contribution towards reducing
India’s dependence on imported solar modules and building a more integrated
domestic manufacturing base. Going forward, the effectiveness of the scheme will
depend not only on the scale of capacity created, but also on the extent to which
firms achieve higher domestic value addition, remain globally cost-competitive,
develop capabilities across the wider value chain, and sustain export growth amid
rapidly changing global market conditions.
12.1.4 Industry Performance: A comprehensive overview
Against the target of around 48.3 GW of fully or partially integrated solar module
manufacturing capacity, India’s overall solar PV module manufacturing capacity
has increased substantially from around 8 GW before the scheme to nearly 116 GW
as of October 2025. Of this, around 24 GW, or 20.7%, is directly attributable to PLI-
supported projects, indicating a significant contribution of the scheme to capacity
creation. Solar PV module imports declined from approximately USD 4.35 billion
in FY2023–24 to USD 2.15 billion in FY2024–25, while exports increased sharply
from USD 83 million in FY2021–22 to USD 1.97 billion in FY2023–24, remaining
relatively strong at around USD 1.12 billion in FY2024–25. These trends suggest
that domestic manufacturers are progressively gaining scale and improving their
ability to compete in international markets.
12.1.5 Evaluation Matrix for Analysing Impact assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focus on the following key questions:

79Impact Assessment of PLI Schemes
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:
Parameters Impact
Investments – R 64,873
Gestation period
Production
Exports
Employment Generation (in Nos.)-14,794
(Cumulative till March 2026)
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable
12.1.6 Key Insights:
(i) Solar PV manufacturing is among the clearest examples of a new manufacturing
sector emerging from a limited manufacturing base to a major priority under
Government policy. Its significance extends beyond module production: the
scheme has catalysed investment and capacity creation in a sector that is
now central to India’s industrial, energy-security, and clean-energy strategy.
Solar PV, which previously did not occupy such a prominent position in India’s
manufacturing landscape, has emerged as one of India’s major new strategic
manufacturing priorities.
(ii) The scheme had 3 beneficiaries in Tranche-I. The extent of integration would
be Polysilicon + Wafers + Cells + Modules. In Tranche-II, the scheme allows
for flexibility across 3 baskets. Basket-1 comprises of the entire integration
i.e., Polysilicon + Wafers+ Cells+ Modules. Three beneficiaries have been
selected for Basket-1. Basket-2 comprises of Wafers + Cells + Modules and five
beneficiaries are selected under this basket. Basket-3 comprises of only Cells
+ Modules and has three beneficiaries.
(iii) India’s solar PV manufacturing capabilities are presently at initial stages of
development. There exists considerable technology gap. The scheme however
has resulted in substantial capacity expansion. Around 21% of the total capacity
created in the country has been a direct outcome of PLI. Further, imports of
solar PV modules have fallen in recent years.

80 Impact Assessment of PLI Schemes
(iv) It needs to be noted that this sector is facing significant uncertainty. First,
the prices of solar cells in the international market (including India) are very
volatile owing to the fact some major solar cell exporting countries have
slashed the prices. Further, whether this price reduction is due to efficiency
reasons or just a dumping exercise, is not clear from the available data. If it is
the former, lower prices are permanent and may deter the Indian firms from
further investments. If it is the latter, the reduced prices are more transient,
and the Indian industry may benefit from the PLI scheme. Finally, supply chain
required for solar cells is heavily controlled by a few international players,
exacerbating the uncertainty. Overall, there have been considerable progress
in capacity expansion, investments and import substitution in solar PV sector.

81Impact Assessment of PLI Schemes
The Production Linked Incentive
Scheme for Food Products
13.

82 Impact Assessment of PLI Schemes
13.1 PLI Scheme on Food Products
13.1.1 Overview
The Production Linked Incentive (PLI) Scheme for Food Processing Industries
(PLISFPI) represents a significant policy initiative aimed at strengthening India’s
food processing sector by promoting large-scale manufacturing, enhancing
farmer incomes, generating employment, and fostering global competitiveness.
Implemented in two rounds and later merged for analytical consistency, the
scheme covers multiple segments including ready-to-eat/ready-to-cook products,
processed fruits and vegetables, marine products, mozzarella cheese, MSME-led
innovation and organic products, branding initiatives, and millet-based products.
The scheme has an overall outlay of
₹10,900 crore. Under Category 1, the allocated
outlay comprises
₹4,181 crore for Ready-to-Eat/Ready-to-Cook (RTE/RTC)
products,
₹3,582 crore for processed fruits and vegetables, ₹993 crore for marine
products, and
₹283 crore for mozzarella cheese. Category 2 has an outlay of ₹250
crore, while Category 3, covering branding and marketing of Indian food products
abroad, has an outlay of
₹1,500 crore. Category 4, comprising the millet component
introduced under Round-2, has an outlay of
₹800 crore, which is to be funded from
available savings under the RTE/RTC segment.
The scheme defines four distinct beneficiary categories to accommodate different
types of applicants. Category-1 consists of large entities applying for incentives
based on Sales and Investment Criteria, covering subcategories such as Ready
to Eat/Ready to Cook, Marine, Fruits & Vegetables, and Mozzarella Cheese;
applicants in this category also have the option to undertake Branding & Marketing
activities abroad and claim incentives for the same. Category-2 is reserved for
MSME applicants manufacturing innovative or organic products, who apply for PLI
incentives based solely on sales, with subcategories divided into innovative and
organic products. Category-3 is meant for applicants who are applying exclusively
for incentives related to Branding & Marketing activities abroad, without a sales – or
investment-based claim. Finally, Category-4 covers applicants primarily engaged
in the manufacturing of millet-based products.
Table 13.1: PLI-FPI Fund Disbursement
CategorySub-category
No. of
Firms
Approved
Firms Currently
Active under
PLI
No. of PLI
Recipients
PLI
Disbursed
( ₹crore)*
1
Ready to Eat/Ready to
Cook
12 12 10 1,253.34
1 Fruits & Vegetables 28 25 19 909.53
1 Marine 11 9 9 251.07
1 Mozzarella Cheese 4 4 3 56.27

83Impact Assessment of PLI Schemes
CategorySub-category
No. of
Firms
Approved
Firms Currently
Active under
PLI
No. of PLI
Recipients
PLI
Disbursed
( ₹crore)*
2 Organic 11 10 8 7.334
2 Innovative 2 2 0 0
3
Branding & Marketing
(exclusive)
60 56 16 96.30
3
Branding & Marketing
(common with Cat-1)
17 15 — —
Total (Categories 1, 2 & 3)145 133 65 2,573.84
4 Millets – Large Entity 8 8 7 30.80
4 Millets – MSMEs 22 21 11 19.53
Total (Category 4) 30 29 18 50.33
Total (All Categories) 175 162 83 2,624.17
* cumulative data MoFPI FY-26.
The performance of the scheme varies across categories, with large firms under
Category 1 emerging as the primary drivers of growth. This category demonstrates a
stable and upward trajectory in sales, supported particularly by strong performance
in ready-to-eat/ready-to-cook products and processed fruits and vegetables.
Export performance is largely positive, and employment generation aligns with
output growth. However, certain segments such as mozzarella cheese and marine
products exhibit signs of volatility, indicating sector-specific demand fluctuations
and competitive pressures.
In contrast, Category 2, comprising MSMEs engaged in innovative and organic
products, shows a more inconsistent performance. Sales shows periods of
growth followed by decline, ultimately returning close to base-year levels. Export
performance remains subdued, and employment generation is limited, suggesting
structural challenges such as scale constraints and limited market access. Although
the organic segment shows minor signs of recovery, the overall trajectory remains
fragile.
The introduction of millet-based products provides a relatively more encouraging
outlook. Both large firms and MSMEs in this segment display consistent growth
in sales and exports. However, even within this category, the organic segment
continues to underperform.
From a broader perspective, the scheme has been successful in stimulating
investment, with total investments reaching approximately
₹9,207 crore by March
2026, exceeding initial targets. This reflects a strong response from industry
participants. The scheme has also supported branding and marketing efforts,
although their impact on global market penetration remains uncertain due to the

84 Impact Assessment of PLI Schemes
inherently gradual process of building international distribution networks, ensuring
regulatory compliance, and establishing consumer trust.
Industry-level trends provide important context to these outcomes. The food
processing sector experienced significant volatility in recent years, with a sharp post-
pandemic recovery in 2021–22 driven by demand rebound and inflation, followed
by a slowdown and near-stagnation in 2023–24 due to demand compression. This
pattern reflects a temporary overshoot followed by market correction rather than
a structural transformation, which is important when interpreting the scheme’s
impact.
Overall, the evidence suggests that the PLI scheme for food processing has
successfully led to additional investment, increased production, and higher
employment beyond natural trends, while also improving export potential, albeit
unevenly across categories. The benefits are more pronounced among large
firms, whereas MSMEs continue to face structural constraints. Going forward, the
scheme’s long-term success will depend on its ability to sustain growth momentum,
strengthen MSME participation, and translate initial gains into durable global
competitiveness.
13.1.2 Implementation Strategy
The scheme was implemented in two rounds, with applications invited for millet
and organic products in the second round. Unlike Round-1, Round-2 did not
prescribe an investment criterion, and the number of selected applicants was
relatively limited. In view of these differences, the Ministry suggested that Round-1
and Round-2 be considered together and analysed as a single scheme, with millets
treated as the fourth category.
The scheme aims to support the creation of global food manufacturing champions,
promote Indian food-product brands, generate employment opportunities,
particularly in off-farm activities, and ensure remunerative prices for farm produce.
13.1.3 Performance Analysis
Investment under the scheme has been robust. As of March 2026, total investments
amount to approximately
₹9,207 crore, surpassing the initial targets. This reflects
strong industry participation and a positive response to the incentives provided
under the scheme.
The scheme has also supported branding and marketing initiatives for domestic
firms. However, there is limited evidence at this stage to conclusively assess
whether these efforts have translated into enhanced global market penetration
or significantly improved export competitiveness. This is partly because the
development of global distribution networks, brand recognition, and consumer
trust in international markets is inherently a gradual process, requiring sustained
investment, consistent quality standards, regulatory compliance, and long-term

85Impact Assessment of PLI Schemes
engagement with global value chains. Additionally, firms often face challenges
related to market access barriers, certification requirements, and competition from
established global players. This remains an important area for future evaluation.
(i) Category 1
Category 1 demonstrates a relatively strong and stable performance trajectory
over the assessment period. Sales in this category have exhibited a consistent
upward trend, indicating sustained demand and effective market positioning
of its constituent segments. Refer Graph H.2 in the appendix. Within this
category, certain segments have emerged as clear growth drivers. Ready-
to-eat/ready-to-cook products and fruits and vegetables have shown steady
and continuous expansion, reflecting evolving consumer preferences towards
convenience-oriented and health-conscious food choices. Refer Graphs H.4 &
H.7 in the appendix.
However, not all segments within Category 1 have maintained this momentum.
The mozzarella cheese segment, which initially recorded consistent year-on-
year growth, experienced a decline in 2024–25, suggesting potential demand
saturation or increased competitive pressures. Similarly, the marine segment
displayed a steady growth pattern with a notable spike in 2021–22, followed
by a decline in 2023–24 and subsequent stabilization. Refer Graphs H.5 & H.6
in the appendix.
Export performance in Category 1 has largely remained positive, with most sub-
categories recording steady growth. The marine segment, however, stands out
as an exception, exhibiting volatility in export trends. Employment generation
within the category has generally been positive, aligning with output growth,
although segments such as mozzarella cheese have shown relatively weaker
employment expansion in recent periods. Refer Graphs H.14, H.16, H.17, H.18,
H.19 & H.25 in the appendix.
(ii) Category 2 (MSMEs)
In contrast, Category 2 presents a comparatively weaker and more volatile
performance profile. Sales trends in this category do not exhibit a consistent
upward trajectory. While the years 2020–21 and 2021–22 recorded growth, this
was followed by a decline in 2022–23. Although there was a temporary recovery
in 2023–24, sales declined again in 2024–25, reverting to levels comparable to
the base year (2019–20). This indicates a lack of sustained growth momentum.
Refer Graph H.3 in the appendix. At the sub-category level, both segments
within Category 2 are broadly on a declining path, despite some variation
in performance across individual firms. The organic segment shows faint but
positive signs of recovery; however, the pace of growth remains modest and
insufficient to offset the overall downward trend. Refer Graphs H.8 & H.9 in the
appendix

86 Impact Assessment of PLI Schemes
Export performance further reinforces this pattern, with Category 2 sub-
categories exhibiting a general decline, suggesting limited competitiveness in
international markets. Employment trends in this category are also subdued,
reflecting the overall stagnation in output and investment. Refer Graphs H.15,
H.20, H.21, & H.25 in the appendix.
(iii) Category 4 (Round 2) – Millet-Based Products
Focusing on millet-based products, segment presents a more encouraging
outlook. Millet-based products have demonstrated consistent growth across
both large firms and MSMEs, indicating the effectiveness of policy support
combined with rising consumer awareness regarding overall health benefits.
Refer Graph H.11 in the appendix. However, the organic segment within this
category continues to face challenges. Despite being aligned with broader
health and sustainability trends, it has not experienced comparable growth.
Refer Graph H.10 in the appendix. Export trends for millet-based products are
positive, with a noticeable increase over the assessment period. Employment
generation in Round 2 is broadly positive, although the organic segment again
shows relatively weaker outcomes. Refer Graphs H.22, H.23, H.24 & H.25 in the
appendix.
13.1.4 Industry Performance: A Comprehensive Overview
Overall sales growth in the food processing industry for the entire Industry as
a whole shows notable fluctuation over recent years, with 2020–21 recording a
subdued due to the pandemic shock, followed by an exceptionally high spike in
2021–22 (peak growth year in the series) driven by recovery and inflationary effects.
This was followed by a moderation in 2022–23 (returning to mid-range growth
levels), and then a sharp and unusual collapse in 2023–24 to approximately 0.85%,
indicating near-stagnation despite ongoing inflation. The preliminary recovery in
2024–25 shows a modest uptick. The most unusual values in the series are thus the
abnormally high positive growth in 2021–22 and the near-zero growth in 2023–24,
reflecting a post-pandemic overshoot followed by a strong demand compression
phase.
The spike in food processing sales in Fy 2021–22 reflects a temporary alignment
of post-pandemic demand recovery and inflation-driven price effects, resulting in
an exceptional increase in nominal sales. This surge was not solely market-driven;
government policies during COVID primarily acted as stabilisers by sustaining
demand, ensuring supply chain continuity, and facilitating export expansion,
thereby creating the conditions for this sharp rebound. However, the subsequent
decline in Fy 2023–24, despite continued inflation, indicates a contraction in real
demand, where falling consumption volumes outweighed price gains. Together,
this pattern is consistent with a classic post-shock overshoot followed by a phase
of market correction rather than a structural shift in industry performance.

87Impact Assessment of PLI Schemes
13.1.5 Evaluation Matrix for Analysing Impact assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focus on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:
Parameters Impact
Investments – ` 9,207 crore  
Production – ` 4,82,051 crore  
Exports  
Employment Generation (in Nos.) – 3,29,200  
(Cumulative till March 2026)
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable
Production values have fallen in 2025–26 but still are over 50% of the targets.
Export for some categories have increased more than the others.
13.1.6 Key Insights:
(i) The Food Processing PLI has demonstrated how manufacturing incentives can
catalyse sectoral growth and generate employment across wider value chains.
Government data shows that PLI-supported food products recorded sales of
₹1,08,854 crore in FY 2025–26, compared with ₹58,758 crore in FY 2019–20.
The sector has also generated around 3.29 lakh jobs and created approximately
35 lakh MT per annum of food processing and preservation capacity, linking
manufacturing growth with farmers, food enterprises, and supply chains. The
investment and capacity creation have extended their impact beyond the
factory floor and strengthened the wider ecosystem of processing, storage,
logistics, and distribution.

88 Impact Assessment of PLI Schemes
(ii) Category-3 that is incentive for branding and marketing requires attention.
As per the scheme, applicants will be extended financial incentives @ 50%
of expenditure on Branding & Marketing abroad subject to a maximum grant
of 3% of Sales of food products or `50 crore per year, whichever is less. The
minimum expenditure for incentive shall be
₹5 crore over a period of five years.
In such case, an admissible grant would be `2.5 crore. Support is insignificant
for any global branding.
(iii) With regard to the objective of creating global champions, the outcomes
so far appear to be limited. At this stage, there is insufficient evidence to
establish that PLI-supported investments have resulted in the emergence of
globally competitive champions. However, the longer-term impact of these
investments may become more evident as the participating firms scale up
production, strengthen capabilities and expand their presence in international
markets.
(iv) One critical observation on this scheme is the PLI data of production is almost
equal to the overall production of some of the beneficiary companies. This is
unusual, as several beneficiary companies are big names in the food processing
sector, so, value of production for other than PLI categories are likely to be
substantial. Therefore, any assessment of additionality must be undertaken
with careful consideration of the underlying factors, as, it is not clear whether
without incentives the production would have shown similar trend. There is a
possibility of repurposing by beneficiary companies to claim PLI benefits.
(v) Overall, the analysis suggests that the scheme is on track and has been fairly
successful in achieving the desired objectives. It has catalysed a wave of
positive spin-offs across the entire agricultural and industrial value chain.

90 Impact Assessment of PLI Schemes
The Production Linked Incentive
Scheme for Speciality Steel
14.

91Impact Assessment of PLI Schemes
14.1 PLI Scheme for Speciality Steel
14.1.1 Overview
The Production Linked Incentive (PLI) Scheme for Speciality Steel is aimed at
strengthening India’s domestic manufacturing capabilities by promoting the
production of high-quality steel grades, reducing import dependence, and
enhancing export potential. With an outlay of
₹6,322 crore, the scheme seeks to
encourage firms to move up the value chain and develop advanced steel products
within the country. An incentive of
₹236 crore has been disbursed to participating
companies so far in the scheme.
Third round of PLI Scheme for Speciality Steel (PLI 1.2) was launched on 04
November 2025, covering 22 product sub-categories under four product categories,
namely: (i) Steel Grades for Strategic Sector, (ii) Commercial Grades – Category
1, (iii) Commercial Grades – Category 2, and (iv) Coated & Wire Products. The
scheme offers incentive rates ranging from 4% to 15% for a period of five years,
commencing from FY 2025–26.
14.1.2 Implementation Strategy
The implementation framework is based on five target segments, with products
further divided into specified sub-categories and PLI Slabs A, B and C, with higher
incentive rates generally applicable to Speciality grades having greater import-
substitution potential. Applications are submitted online within the notified window,
followed by scrutiny of eligibility and commitments against prescribed investment
and production thresholds. Applicants may apply for multiple sub-categories, with
separate MoUs permissible for each selected sub-category. Selected companies
are required to execute an MoU with the Ministry of Steel and furnish performance
security equivalent to 0.5% of committed investment.
14.1.3 Performance Analysis
Preliminary evidence suggests that while the scheme has succeeded in stimulating
additional investment beyond the natural trend, this has not yet translated into
production gains exceeding expected levels. At the same time, employment is
assessed to have increased, although supporting data remains limited, and export
potential cannot yet be evaluated.
In its current phase, the scheme is still at an early stage of implementation, with
limited participation translating into actual incentive disbursement. So far, only one
firm, JSW Steel Coated Products Limited under the tin mill products sub-category,
has received PLI support. While there are 67 applicants across 21 sub-categories
(with 32 unique applicants), and 43 firms have signed Memoranda of Understanding

92 Impact Assessment of PLI Schemes
(MoUs), only a small subset of firms has begun reporting performance data.
Specifically, 13 firms reported in 2024–25, 5 in 2023–24, and only 5 firms have
provided consistent data across both years.
Among these reporting firms, production shows a clear upward trend, indicating
that capacity Utilisation and output levels are gradually improving. This suggests
a positive outlook for future sales and reflects early signs of operational progress
under the scheme. However, investment trends present a contrasting picture, with
a decline observed over the same period. This may indicate that firms have already
undertaken initial capital expenditure and are now transitioning toward production
rather than continuing to invest at earlier levels.
Despite the encouraging trend in production, the scheme’s broader impact remains
difficult to assess due to significant data gaps. No information is available on
employment generation or export performance, limiting the ability to evaluate key
policy objectives related to job creation and global competitiveness. Additionally,
some firms have discontinued their MoUs, while others remain in various stages
of commitment, pointing to evolving participation dynamics and possible
implementation challenges.
Overall, the PLI scheme for Speciality steel shows early signs of progress in boosting
production capacity, but its full impact remains uncertain. A more comprehensive
assessment will require broader participation, improved reporting, and the
completion of subsequent rounds to better understand its long-term effectiveness
in achieving structural transformation in the steel sector.
14.1.4 Evaluation Matrix for Analysing Impact assessment of the Scheme
The impact of the PLI Scheme is being evaluated by assessing whether the scheme
generated outcomes over and above the underlying/natural growth trend of the
participating firms. The evaluation focus on the following key questions:
(i) Additional Investment: Did the PLI Scheme lead to additional investment by
the manufacturers above the natural trend?
(ii) Additional Production: Did the incremental investment supported by the PLI
Scheme translate into additional production beyond the underlying/natural
growth trend?
(iii) Additional Employment: Did the PLI Scheme result in incremental employment
beyond natural trend?
(iv) Export Potential: Did the PLI Scheme enhance the export potential?
Overall performance of the Scheme on different parameters is as under:

93Impact Assessment of PLI Schemes
Parameters Impact
Investments – ` 23,896 crore  
Production – 2774 (‘000 tonnes)  
Exports  
Employment Generation (in Nos.) – 14,138  
(Cumulative till March 2026)
Green Yellow
Orange Light Blue
On-Track
Evidence of Impact not sufficient
Partial Impact
Data unavailable
There are early signs of production capacity expansion. Full impact assessment
requires broader participation, improved reporting, and completion of
subsequent rounds.
14.1.5 Key Insights:
(i) The Speciality Steel PLI is strengthening domestic capacity in high-value
steel products required by sectors such as automobiles, energy, defence
and infrastructure. In this capital-intensive sector, the catalytic effect of
PLI is reflected in the mobilisation of investment towards specialised and
technologically advanced manufacturing capacity, strengthening the domestic
material base for India’s wider industrial growth.
(ii) The scheme has 67 applicants out of which 32 are unique applicants across
21 sub-categories. With the outlay being
₹6,322 crore, a rough estimation of
incentive per applicant is around
₹95 crore, which is moderate considering
steel to be a costly, capital intensive and low margin sector. However, the
target segments are specialised categories of steel.
(iii) The scheme design has been faulty. The initial design included high investment
eligibility thresholds, and slow guideline notification. Three successive rounds
(original scheme, PLI 1.1, PLI 1.2) and threshold removals were required to bring
the scheme in its present form. There have been several revisions in guidelines
and product categories from time to time which has further increased the
process delays in implementation of the scheme.
(iv) The scheme remains in an early stage of implementation, despite broad
applicant participation. Investment in this scheme has been initially increasing
and moderating subsequently. This is understandable as steel industry require
upfront investment before it commences its production. Production over the
years is showing upward trend. However, although the investment has been
noteworthy, the production is yet to exceed the expected level. Another
question worth asking is whether the quantum of investment allocated for this
sector is sufficient to create a tangible impact.

94 Impact Assessment of PLI Schemes
Conclusion
and
Way Forward

95Impact Assessment of PLI Schemes
Conclusion and Way Forward
The PLI Scheme, conceptualised and implemented by the Government of India, constitutes
a significant reorientation of industrial policy from an input-driven to an outcome-driven
framework. The Scheme is predicated on the principle that fiscal support ought to be
extended in proportion to demonstrated performance, rather than allocated uniformly across
sectors irrespective of their productive capacity. In this regard, the Scheme identifies sectors
possessing the requisite strengths and growth potential, establishes clearly defined production
and investment targets, and disburses incentives strictly upon the verified achievement of such
targets and the corresponding realisation of sales. Sectoral growth is thereby achieved not as
a directly administered outcome, but as a consequential effect of enhanced enterprise-level
performance.
This methodology represents a considered departure from the conventional practice of
extending financial outlays without a corresponding and verifiable linkage to outcomes. By
conditioning disbursement upon the attainment of measurable production benchmarks, the
Scheme incorporates an inherent efficient Utilisation of public funds. This design feature has
been instrumental in stimulating confidence among domestic and foreign investors alike, who
regard performance-linked incentive mechanisms as indicative of a credible and sustained
policy commitment on the part of the Government.
A further distinguishing feature of the PLI Scheme is its explicit rejection of a uniform, “one-size-
fits-all” approach to sectoral support. In its place, the Scheme adopts a differentiated framework
calibrated to the specific strengths, production capabilities, and competitive potential of
individual sectors, with the objective of enabling participating enterprises to attain the status of
global manufacturing champions.
An evaluation of the Scheme’s implementation to date indicates that its catalytic influence upon
sectoral growth is exercised through several interlinked mechanisms. In the first instance, the
certainty of fiscal support, contingent upon the attainment of prescribed scale, has induced
enterprises to undertake capacity augmentation and capital expenditure decisions that might
otherwise have been deferred owing to demand uncertainty or constraints on the availability
of capital, thereby accelerating the investment cycle across the sectors covered under the
Scheme. Secondly, by extending eligibility to established domestic manufacturers as well as new
entrants, including foreign enterprises, the Scheme has engendered a competitive environment
conducive to the transfer of technology, the deepening of domestic value addition, and the
integration of Indian enterprises into global supply chains, most notably in sectors such as
electronics, telecommunications equipment, and Speciality steel. Thirdly, the scale of production
incentivised under the Scheme has generated substantial forward and backward linkages,
thereby stimulating ancillary and component manufacturing ecosystems and generating
employment beyond the anchor units in direct receipt of incentives.
Considered cumulatively, these effects suggest that the Scheme functions not merely as an
instrument of enterprise-level subsidy, but as a mechanism for effecting structural transformation
within targeted sectors, whereby their contribution to domestic value addition is enhanced, export
competitiveness is strengthened, and import dependence is reduced, particularly in respect of
strategic and technology-intensive segments of the economy.

96 Impact Assessment of PLI Schemes
The success of PLI is best understood not only through its aggregate outcomes but also through
the distinct transformation taking place across individual sectors. The larger success of PLI is
that it has worked differently across different sectors, according to the needs of each industry.
In mobile phones, it has helped create global manufacturing scale. In Pharmaceuticals Drugs,
it has strengthened India’s position in high-value manufacturing and strategic inputs. In White
Goods, it is deepening component localisation. In Food Processing, it is generating employment
across wider value chains.
At the same time, perhaps its most important long-term contribution is the emergence of entirely
new strategic manufacturing priorities. Solar PV and ACC batteries, which did not historically
occupy a comparable position in India’s manufacturing landscape, are now central to India’s
industrial, energy-security and clean-energy strategy.
The experience across the 14 sectors demonstrates that this catalytic effect has taken different
forms. In sectors where India already possessed a strong manufacturing base, PLI has accelerated
investment, technological upgrading, and movement towards higher-value manufacturing. In
sectors with relatively limited domestic capability, it has helped catalyse the creation of new
manufacturing ecosystems. Thus, while the form and pace of transformation vary across sectors,
sectoral growth has been catalysed across the entire PLI landscape.
While the PLI scheme has shown encouraging early results, the focus now must shift from
assessing its initial success to strengthening its long-term effectiveness. The way ahead lies
not merely in continuing the scheme, but in refining its design so that it can deliver deeper and
more sustained industrial transformation.
First, the varied performance of the PLI scheme across sectors requires more focused study.
While some sectors have responded strongly with visible increases in investment, production,
employment, and exports, others have shown relatively modest progress. This variation is often
linked to differences in technology adoption, gestation periods, global competition, and capital
requirements. A sector-specific understanding of these constraints is necessary so that policy
design can move beyond a uniform approach and become more strategically targeted.
Second, the scheme in its current form is largely supply-driven. It encourages firms to increase
production and build capacity through financial incentives linked to output. While this supply-
push approach is important, long-term sustainability also requires strong demand-side support.
The next generation of such schemes with similar nature should therefore incorporate demand-
pull mechanisms alongside the existing supply-side incentives. This could include stronger
domestic procurement frameworks, export market development, strategic government
purchasing, and policies that stimulate consumption of domestically produced high-value
goods. A balanced combination of supply-push and demand-pull would improve the long-term
viability of large-scale manufacturing.
Third, data collection and reporting mechanisms across ministries need urgent standardisation.
At present, information regarding additional revenue, employment, production, and exports is
often inconsistent across sectors, making meaningful comparison and policy evaluation difficult.
Clear guidelines must be established regarding what firms should report, when reporting should
take place, and how annual progress should be monitored. Better data systems would improve
transparency, strengthen policy feedback, and allow mid-course corrections where necessary.

97Impact Assessment of PLI Schemes
Fourth, industry participation is important in deciding the targets a sector faces. More stringent
targets, especially in sectors where gestation periods are long and there is lot demand
uncertainty (owing to dynamics of international trade, changing geopolitical circumstances,
etc.) will lead to lower adoption of the PLI scheme. Further, mechanisation of industry can also
lead to the industry finding it difficult to reach employment targets. Therefore, the participation
of industry in designing sector specific policies becomes more imperative. Along with industry
participation, there has to be a more collaborative discussion between the central and state
governments. While the PLI scheme is by the central government, some of the industries are
heavily governed by the local laws. Therefore, this dialogue is essential in ensuring the success
of the scheme.
Fifth, in many sectors, investment responds first, while the full effects on production,
employment, and exports emerge only after a significant lag. This is especially true in sectors
involving advanced technologies and long gestation periods. Therefore, policy evaluation
must remain patient and realistic, avoiding premature judgments while continuing institutional
support where necessary. If supported by stronger demand creation, better policy targeting,
and improved monitoring systems, the scheme can move beyond short-term incentives and
become a long-term strategy for achieving the Vision 2047 goals of investment growth, export
competitiveness, employment generation, and industrial self-reliance.
Finally, The COVID-19 pandemic disrupted global supply chains, depressed investment and
highlighted India’s dependence on imports in several strategic manufacturing sectors. Against
this backdrop, the Government launched PLI schemes across 14 strategic sectors, with the
objective of strengthening domestic manufacturing, attracting investment, integrating India
with global value chains, promoting exports and generating employment.
The design of PLI was particularly relevant for restoring industry confidence and investment
sentiment because the incentive was linked to actual incremental production/sales rather than
being provided upfront. This reduced the risk associated with fresh investment and provided
firms with greater visibility of returns as production scaled up.
The PLI programme marked a shift in India’s industrial policy from broad-based input support
towards targeted, outcome-linked incentives. Introduced in the post-COVID period, the scheme
sought to address two simultaneous challenges: reviving private investment and manufacturing
activity after the pandemic, and using the global reconfiguration of supply chains as an
opportunity to build domestic manufacturing capabilities. The subsequent performance
indicates a significant expansion of investment, production and exports across the targeted
sectors.
The evidence suggests that PLI has contributed to a broad-based strengthening of India’s
manufacturing ecosystem, although the magnitude and nature of the impact differ across
sectors. In emerging sectors, the principal outcome has been capacity and ecosystem creation,
while in established sectors the focus has been on upgrading capabilities and moving towards
higher-value manufacturing. The post-PLI performance should consequently be viewed as
evidence of strengthening manufacturing capacity and investment sentiment rather than as a
simple causal attribution of all sectoral growth to PLI.
The PLI scheme can be viewed as a formal way of interaction between the government and
the market players (firms). By way of incentivising performance, the government sends signals

98 Impact Assessment of PLI Schemes
on what possible fronts it is feasible to direct growth and by the responses of the players,
the government gets notified on the bottlenecks and their current standing. Since the current
international geopolitical scenario is volatile, such policies designed to reward performance can
bridge the gap between what the market needs now and what support the government will be
able to provide.
A larger question to ask is that as the Indian manufacturing sector becomes globally competitive
several policy measures are required. For instance, several countries, in the recent times looked
upon tariffs to make the local industry more effective. However, India seems to have chosen
the path of Production Linked Incentives to make the industry more competitive. Unlike tariffs,
which makes international competition weaker, PLI aims at making domestic firms more efficient
through investing in scale of global standards. While early trends indicate that this scheme
is showing signs of being a successful intervention, only time will tell how this scheme has
metamorphosised the Indian manufacturing sector.

Appendix

100 Impact Assessment of PLI Schemes
Table 5: Year on year exchange rate of ₹with US$
Year on year exchange rate of ₹with US$ (SOURCE: World Bank)
Year India Rate of depreciation of Rupee
2015 64.15
2016 67.20 5%
2017 65.12 -3%
2018 68.39 5%
2019 70.42 3%
2020 74.10 5%
2021 73.92 0%
2022 78.60 6%
2023 82.60 5%
2024 83.67 1%
2025 87.16 5%
Argument: If rate of growth of export is more than rate of appreciation of rupee then exports
have improved

101Impact Assessment of PLI Schemes
A Large Scale Electronics Manufacturing LSEM
$ Million
`Crore
MEITY: LSEM – Specified Electronic Components (Round 1)
Graph A1
Graph A2

102 Impact Assessment of PLI Schemes
Graph A3
Graph A4

103Impact Assessment of PLI Schemes
MEITY: LSEM – Domestic (Mobile) Round 1
Graph A5
Graph A6

104 Impact Assessment of PLI Schemes
Graph A7
Graph A8

105Impact Assessment of PLI Schemes
MEITY: LSEM – Global (Mobile>=15000) Round 1
Graph A9
Graph A10

106 Impact Assessment of PLI Schemes
Graph A11
Graph A12

107Impact Assessment of PLI Schemes
B Bulk Drugs
Graph B1
Graph B2

108 Impact Assessment of PLI Schemes
Graph B3
Graph B4

109Impact Assessment of PLI Schemes
Graph B5
$ Million
`Crore
Graph B6

110 Impact Assessment of PLI Schemes
Graph B7
Graph B8

111Impact Assessment of PLI Schemes
Graph B9
Graph B10

112 Impact Assessment of PLI Schemes
Graph B11
Graph B12

113Impact Assessment of PLI Schemes
Graph B13
Graph B14

114 Impact Assessment of PLI Schemes
C Pharmaceuticals Drugs
Graph C1
Graph C2

115Impact Assessment of PLI Schemes
Graph C3
Graph C4

116 Impact Assessment of PLI Schemes
Graph C5
Graph C6

117Impact Assessment of PLI Schemes
Graph C7
Graph C8

118 Impact Assessment of PLI Schemes
$ Million
`Crore
Graph C9
Graph C10

119Impact Assessment of PLI Schemes
Graph C11
Graph C12

120 Impact Assessment of PLI Schemes
Graph C13
Graph C14

121Impact Assessment of PLI Schemes
Graph C15
Graph C16

122 Impact Assessment of PLI Schemes
D MEITY: IT Hardware 2.0
Graph D1

123Impact Assessment of PLI Schemes
E Telecom & Networking Products
Graph E1
Graph E2

124 Impact Assessment of PLI Schemes
Graph E3
Graph E4

125Impact Assessment of PLI Schemes
Graph E5
Graph E6
$ Million
`Crore

126 Impact Assessment of PLI Schemes
Table 5.7
Graph E7
Table 5.8

127Impact Assessment of PLI Schemes
Graph E8
Table 5.9

128 Impact Assessment of PLI Schemes
Graph E9
Table 5.10

129Impact Assessment of PLI Schemes
Graph E10
Table 5.11
Graph E11

130 Impact Assessment of PLI Schemes
Table 5.12
Graph E12
Table 5.13

131Impact Assessment of PLI Schemes
Graph E13

132 Impact Assessment of PLI Schemes
F Drones and Drone Components
Graph F1

133Impact Assessment of PLI Schemes
G Textiles
$ Million
`Crore
Graph G1
Graph G2

134 Impact Assessment of PLI Schemes
Graph G3
Graph G4

135Impact Assessment of PLI Schemes
Graph G5
Graph G6

136 Impact Assessment of PLI Schemes
Graph G7

137Impact Assessment of PLI Schemes
H Food Processing Industries
Graph H1
Graph H2

138 Impact Assessment of PLI Schemes
Graph H3
Sales of Category 1 Subcategories (` Crore)
Graph H4

139Impact Assessment of PLI Schemes
Graph H5
Graph H6

140 Impact Assessment of PLI Schemes
Graph H7
Sales of Category 2 Sub-categories (` Crore)
Graph H8

141Impact Assessment of PLI Schemes
Graph H9
Sales of round 2 – Millets and Organic Products
Graph H10

142 Impact Assessment of PLI Schemes
Graph H11
Graph H12

143Impact Assessment of PLI Schemes
Graph H13
Overall Exports of Category 1 & Category 2 (` Crore)
$ Million
`Crore
Graph H14

144 Impact Assessment of PLI Schemes
Graph H15
Exports of Category 1 Sub-categories (` Crore)
Graph H16

145Impact Assessment of PLI Schemes
Graph H17
Graph H18

146 Impact Assessment of PLI Schemes
Graph H19
Exports of Category 2 Sub-categories (` Crore)
Graph H20

147Impact Assessment of PLI Schemes
Graph H21
Round 2: Exports
Graph H22

148 Impact Assessment of PLI Schemes
Graph H23
Graph H24

149Impact Assessment of PLI Schemes
Graph H25
Graph H26

150 Impact Assessment of PLI Schemes
I Speciality Steel
Graph I1
Graph I2

151Impact Assessment of PLI Schemes
Graph I3