THEBUSINESSBYTES BUREAU
NEW DELHI, FEBRUARY 20, 2026
India’s ambitious Production Linked Incentive (PLI) Scheme, backed by an
outlay of ₹1.91 lakh crore, is emerging as one of the
country’s most consequential industrial policy interventions, catalysing
large-scale investments,
accelerating domestic manufacturing and strengthening export competitiveness
across 14 strategic sectors. With 836 approved applications and cumulative
investments exceeding ₹2.16 lakh crore, the programme is reshaping India’s
production landscape while
generating over 14.39 lakh direct and indirect jobs.
Since its launch in 2020, the PLI framework has marked a decisive shift
from input-based subsidies to performance-linked incentives tied to incremental
output, ensuring measurable outcomes in capacity creation, localisation and
technology adoption. As of December 31, 2025, the scheme has delivered
cumulative production and sales worth more than ₹20.41 lakh crore and exports
exceeding ₹8.3 lakh crore, while ₹28,748 crore has already been disbursed to participating firms, reflecting steady implementation
momentum.
The electronics sector has emerged as a flagship success, with India
transforming into a major global manufacturing hub for mobile phones and IT
hardware. Mobile phone imports have dropped by nearly 77 per cent since FY21,
and domestic production now meets over 99 per cent of local demand. The
manufacturing ecosystem has moved beyond assembly into high-value components
such as printed circuit board assemblies, batteries, camera and display modules,
signalling deeper integration into global value chains and rising domestic
value addition.
In pharmaceuticals, the scheme has enabled the first-time domestic
production of 191 bulk drugs, leading to import substitution worth about ₹1,785
crore and pushing domestic value addition to 83.7 per cent. Indigenous
development of biosimilars, monoclonal antibodies and new chemical entities has strengthened export potential
while enhancing supply chain resilience. Parallel progress in medical devices
manufacturing, including imaging systems, implants and diagnostics, is reducing
dependence on imports through globally benchmarked quality systems.
The automobile and advanced automotive technology segment is witnessing
early gains, particularly in electric mobility, power electronics and safety
technologies, with reported sales of ₹32,879 crore in FY26 indicating the emergence of a technology-led supplier
ecosystem. Telecom and networking products have recorded more than a six-fold
increase in sales over the base year, with exports touching ₹21,033
crore. A key milestone has been the deployment of an indigenous end-to-end 4G technology stack by BSNL, placing
India among a select group of nations with such capabilities.
Food processing has attracted investments exceeding ₹9,200
crore, driven by the adoption of advanced processing technologies and packaging
systems that are enhancing quality, efficiency and
export readiness. In the white goods segment, domestic manufacturing of
critical components such as compressors, motors, copper tubes and LED drivers
has commenced, with domestic value addition projected to reach 75–80 per cent
by FY29, strengthening the component ecosystem.
The textiles sector is undergoing a structural shift towards high-value
man-made fibre and technical textiles, supported by integration with PM MITRA
Parks that enable scale, logistics efficiency and global competitiveness.
Meanwhile, the high-efficiency solar PV module segment is targeting 48 GW of
fully integrated manufacturing capacity across two tranches, backed by
investment commitments of nearly ₹52,942 crore, a move expected
to significantly reduce import dependence in the renewable
energy value chain.
Collectively, these outcomes underscore a broader transition from import
reliance to capability-led domestic manufacturing. The PLI Scheme is not only
expanding production capacity but also fostering technology adoption,
encouraging scale manufacturing and embedding Indian firms more deeply into
global supply chains. By linking incentives directly to incremental output, the
programme has improved transparency, ensured performance accountability and
driven productivity gains.
