In 2020, when the world was reeling from supply chain disruptions and geopolitical realignments, India chose not to retreat inward – it chose to build. The launch of the Production Linked Incentive (PLI) Scheme was not a routine policy announcement. It was a strategic declaration that India would no longer remain merely a marketplace for global goods; it would become a manufacturing powerhouse.
With an incentive outlay of ₹1.91 lakh crore, the PLI Scheme represents one of the most ambitious industrial reform initiatives in independent India. Today, with 836 approved applications across 14 strategic sectors, cumulative investments exceeding ₹2.16 lakh crore, production and sales crossing ₹20.41 lakh crore, exports surpassing ₹8.3 lakh crore, and more than 14.39 lakh direct and indirect jobs generated, the numbers tell a powerful story. But beyond the numbers lies something more significant – a structural shift in India’s manufacturing trajectory.
As of 31 December 2025, ₹28,748 crore has been disbursed as incentives. Critics once questioned whether industry would respond. Industry not only responded – it committed capital at scale.
The genius of the PLI framework lies in its design. It moved away from the old input-based subsidy model and embraced outcome-linked incentives. Firms earn incentives only when they produce and sell more than a defined base year. This ensures efficiency, transparency and accountability. In simple terms: perform, and you are rewarded. Underperform, and the incentive disappears. It aligns public spending with measurable industrial outcomes.
Consider the transformation in electronics manufacturing. India today is no longer just assembling mobile phones; it is building an ecosystem. Mobile phone imports have declined by nearly 77 percent since FY 2020-21. Over 99 percent of domestic demand is now met through local production. That is not incremental reform – that is structural change. Manufacturing has moved beyond screwdriver assembly to printed circuit board assemblies, batteries, camera modules, display modules and enclosures. Integration into global value chains is deepening. The expansion into IT hardware – laptops, tablets, servers and all-in-one PCs – signals a broadening ambition.
In pharmaceuticals and medical devices, the impact is equally significant. For decades, India depended heavily on imports for critical bulk drugs. Under PLI, 191 bulk drugs are now being manufactured domestically for the first time. Import substitution worth approximately ₹1,785 crore has been achieved, and domestic value addition has risen to 83.7 percent. Indigenous development of biosimilars, monoclonal antibodies and new chemical entities strengthens both export competitiveness and supply chain resilience. Medical device manufacturing – imaging systems, implants and diagnostics – is increasingly aligned with globally benchmarked quality standards. The message is clear: self-reliance does not mean isolation; it means capability.
The automobile sector is undergoing a technological pivot. Electric mobility, advanced power electronics and next-generation safety systems are attracting investment. Reported sales of ₹32,879 crore in FY 2025-26 under the Scheme indicate that India is not merely assembling vehicles but building advanced automotive technologies. Supplier ecosystems are strengthening. Innovation is moving upstream.
Telecom and networking products present another compelling case. Sales have increased more than six-fold over the base year FY 2019-20. Exports have risen to ₹21,033 crore. Perhaps most significantly, India’s indigenous end-to-end 4G technology stack has been deployed by BSNL. Very few nations possess such sovereign telecom capability. In an era where digital infrastructure is as strategic as physical infrastructure, this milestone matters.
The food processing sector has witnessed investments exceeding ₹9,200 crore. But this is not just about capacity; it is about modernisation. Adoption of advanced technologies such as ARBBM spice processing systems, Tetra Recart packaging and automated seafood processing equipment enhances quality, efficiency and export readiness. Indian food products are not just reaching global markets – they are competing on standards.
In white goods, particularly air conditioners and LED lights, domestic manufacturing of critical components – compressors, motors, copper tubes, LED drivers – has begun in earnest. Domestic value addition is projected to rise to 75–80 percent by 2028–29. That reduces vulnerability to external shocks and strengthens the component ecosystem.
Textiles have shifted focus toward higher-value man-made fibre (MMF) and technical textiles. Integration with PM MITRA Parks is enabling scale manufacturing, logistics efficiencies and competitiveness. India’s textile story is being rewritten for a global marketplace that increasingly values performance fabrics and industrial applications.
Perhaps nowhere is strategic foresight more evident than in high-efficiency solar PV modules. Under Tranche I and II, the Scheme targets 48 GW of fully integrated solar PV manufacturing capacity, backed by investment commitments of nearly ₹52,942 crore. At a time when renewable energy defines the future of growth, reducing import dependence in solar manufacturing is not just economic policy – it is energy security policy.
From a phase of relatively high import dependence, India’s manufacturing ecosystem is undergoing progressive strengthening. Investment inflows remain sustained. Production capacity continues to expand. Exports are rising. Employment generation is significant – 14.39 lakh jobs represent livelihoods, skill formation and upward mobility.
The broader significance of PLI lies in its systemic impact. It encourages scale. It incentivises technology adoption. It fosters domestic supply chain integration. It pushes firms to deepen localisation. And importantly, it integrates India more meaningfully into global value chains rather than isolating it from them.
Manufacturing competitiveness is not built overnight. It requires capital, policy stability, infrastructure, skills and confidence. The PLI Scheme addresses multiple layers simultaneously. By linking incentives to incremental production, it rewards ambition. By targeting strategic sectors, it aligns industrial growth with national priorities. By insisting on measurable outcomes, it embeds accountability.
The world is reorganising supply chains. Nations are recalibrating industrial strategies. In this evolving landscape, India’s PLI Scheme has emerged as a credible policy instrument. It signals predictability to investors. It demonstrates seriousness to global partners. And it reinforces domestic capability.
The data as of December 2025 reflects momentum. But the deeper story is about direction. India has moved from aspiration to execution. From dependency to capability. From fragmented manufacturing to ecosystem building.
Industrial policy, when poorly designed, distorts markets. When well designed, it catalyses transformation. The Production Linked Incentive Scheme belongs to the latter category. It is not merely about subsidies; it is about scale, standards and sovereignty.
As India advances toward its long-term economic ambitions, manufacturing will remain central. Services alone cannot absorb the demographic dividend. Jobs must be created at scale. Value chains must be deepened domestically. Technology must be indigenised.
The PLI Scheme is not the final chapter. It is a foundational one. And if the trajectory thus far is any indication, India’s manufacturing renaissance is no longer a slogan – it is underway.
