FDI in manufacturing increases by 76% due to PLI Schemes

  • Industry News
  • Jun 15,23
PLI Schemes contribute to increase in production, employment generation, and economic growth. Rajesh Kumar Singh, Secretary, DPIIT made announcement on the significant achievements due to PLI in India.
FDI in manufacturing increases by 76% due to PLI Schemes

The Production Linked Incentive (PLI) Schemes have led to a significant increase in production, employment generation, economic growth and exports in the country. Addressing a press conference in New Delhi, Rajesh Kumar Singh, Secretary, DPIIT said that due to PLI Schemes, there was a significant increase of 76 per cent in FDI in the Manufacturing sector in FY 2021-22 (USD 21.34 billion) compared to the previous FY 2020-21 (USD 12.09 billion).

The PLI schemes as envisioned by the Prime Minister, Narendra Modi with the objective of making India 'AatmaNirbhar' is built on the foundation of 14 sectors with an incentive outlay of Rs 1.97 lakh crore (about US$ 26 billion) to strengthen their production capabilities and help create global champions.

Sectors for which PLI schemes exist and have seen an increase in FDI inflows from FY 2021-22 to FY 2022-23 are Drugs and Pharmaceuticals (+46 per cent), Food Processing Industries (+26 per cent) and Medical Appliances (+91 per cent). PLI Schemes have transformed India’s export basket from traditional commodities to high value-added products such as electronics & telecommunication goods, processed food products etc.

As of date, 733 applications have been approved in 14 Sectors with an expected investment of Rs 3.65 Lakh Crore. 176 MSMEs are among the PLI beneficiaries in sectors such as Bulk Drugs, Medical  Devices, Pharma, Telecom, White Goods, Food Processing, Textiles & Drones.

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

Incentive amount of around Rs 2,900 Crore disbursed in FY 2022-23 under PLI Schemes for eight Sectors viz. Large-Scale Electronics Manufacturing (LSEM), IT Hardware, Bulk Drugs, Medical Devices, Pharmaceuticals, Telecom & Networking Products, Food Processing and Drones & Drone Components.

PLI Scheme has led to major smartphone companies shifting their suppliers to India, for example, Foxconn, Wistron and Pegatron. As a result, top high-end phones are being manufactured in India. It has also resulted in a 20-fold increase in women's employment and localization in IT Hardware such as batteries & Laptops. Secretary, DPIIT said that the value addition in mobile manufacturing in India is to the tune of 20 per cent. “We have been able to increase the value addition in mobile manufacturing to 20 per cent within a period of 3 years whereas countries like Vietnam achieved 18 per cent value addition over 15 years and China achieved 49 per cent value addition in over 25 years. Seen in this perspective, it is a big achievement”, Singh added.

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

Import substitution of 60 per cent has been achieved in the Telecom sector and India has become almost self–reliant in Antennae, GPON (Gigabit Passive Optical Network) & CPE (Customer Premises Equipment). Drones sector has seen a seven-times jump in turnover due to the PLI Scheme which consists of all MSME Startups.

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

Due to the PLI Scheme, there has been a significant reduction in imports of raw materials in the Pharma sector. Unique intermediate materials and bulk drugs are being manufactured in India including Penicillin-G, and the transfer of technology has happened in the manufacturing of Medical Devices such as (CT scan, MRI etc).

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