The Indian manufacturing industry has seen a massive spike in Foreign Direct Investment (FDI) equity inflows, which rose by 69% from $98 billion in 2004-2014 to $165 billion in the 2014-2024 period.
The remarkable development has been heavily boosted by the government's Production-Linked Incentive (PLI) scheme, officials have declared on Monday.
As a part of its ongoing commitment to fostering industrial growth, the government has increased budgetary provision for major sectors under the PLI scheme for 2025-26 by a considerable margin. This action further reflects its commitment to strengthening domestic manufacturing capacities and fueling economic growth.
Up to August 2024, Rs 1.46 lakh crore of investments came in through the scheme in real terms, while projections foresee such investments reaching a level more than Rs 2 lakh crore even in the very next year. These investment streams have already pushed production and sale levels considerably upward to a massive Rs 12.50 lakh crore and enabled the generation of nearly 9.5 lakh direct and indirect jobs—ones that would very soon rise up to 12 lakh.".
A number of sectors have seen significant funding increases, with that for Electronics and IT Hardware going up from Rs 5,777 crore (revised estimate for 2024-25) to Rs 9,000 crore. The Automobile and Auto Components segment has also gone up significantly, from Rs 346.87 crore to Rs 2,818.85 crore. Even the textile sector has been given a big push, with the allocations going up from Rs 45 crore to Rs 1,148 crore.
The PLI scheme has been a game-changer for India's electronics manufacturing sector, making India a net exporter rather than a net importer of mobile phones. Local manufacturing has risen from 5.8 crore units in 2014-15 to 33 crore units in 2023-24, and imports have fallen significantly. Exports have crossed 5 crore units, while FDI in the segment has gone up by 254%, cementing India's position as an international manufacturing hub.
With an investment of $3.5 billion (Rs 20,750 crore), PLI in the auto sector has hugely spurred high-tech automotive industry investments. A total of over 115 units applied for availing the scheme, and of these, 85 got nod for incentives resulting in an overall investment of $8.15 billion (Rs 67,690 crore), much higher than initial projections. This achievement strengthened India's global position in the auto market.
The PLI scheme for solar photovoltaic (PV) modules has played a critical role in supporting India's renewable energy goals. The initial phase, supported by $541.8 million (Rs 4,500 crore), facilitated the establishment of significant manufacturing units. The second phase, on the other hand, is set to establish 65 GW of manufacturing capacity, fueled by a $2.35 billion (Rs 19,500 crore) investment. This program is projected to generate job opportunities, mitigate import dependence, and promote technology development in solar energy.
In the telecommunication industry, India has registered 60% import substitution under the PLI scheme, with foreign technology companies establishing manufacturing facilities within the country.
India has thus become a leading exporter of 4G and 5G telecom equipment, bolstering domestic infrastructure and positioning itself more competitively in the international supply chain, as per the Ministry of Commerce and Industry.
Read also| India's Manufacturing Growth Slows but Remains Resilient in February: Report
