The Union Cabinet has approved the Production Linked Incentive (PLI) Scheme for 10 “key sectors”, including electronics, telecom and solar PV. The scheme essentially hopes to promote indigenous manufacturing and increase exports in the coming years, as part of the government’s Atmanirbhar Bharat (“self reliance”) vision. A total of ₹1.45 lakh crore has been earmarked for the scheme over a five-year period. Applications for the scheme will be appraised by the Expenditure Finance Committee (EFC), and approved by the Cabinet.
For the telecom sector, which has an outlay of ₹12,195 crore, the PLI scheme will support the manufacturing of 4G, 5G, next generation radio access network and wireless equipment. This comes at a time when many countries in the world are trying to limit the influence and involvement of Chinese companies in the 5G ecosystem. India is currently working with Japan, the United Kingdom, with support from the United States, Australia and so on, to develop 5G and 5G Plus technologies. Additionally, the manufacturing of Internet of Things (IoT) access devices and enterprise equipment such as routers and routers will be supported.
“Telecom equipment forms a critical and strategic element of building a secured telecom infrastructure and India aspires to become a major original equipment manufacturer of telecom and networking products.” — Union Cabinet
In the electronics manufacturing sector, which has an outlay of ₹5,000 crore, the scheme will support semiconductor fabrication, laptops and computer equipment such as servers and IoT devices. Per the official release, the government believes that its push for data localisation, the IoT market, and projects such as Smart City and Digital India will increase the demand for electronic products.
The Advanced Chemistry Cell (ACC) battery sector has been given a significant outlay of ₹18,100. ACC batteries are rechargeable batteries than can be used in consumer electronics, electric vehicles and renewable energy.
That the self-reliance theme is closely linked to security and strategic interests is also evident from the ₹4,500 crore outlay given to the solar PV manufacturing sector. The Cabinet noted that the large imports of solar PV panels pose risks to the resilience of supply-chains and “have strategic security challenges considering the electronic (hackable) nature” of the value chain.
The central government had recently launched another PLI scheme for mobile manufacturing, in which ten manufacturers were approved. The international companies included Samsung, Rising Star, Foxconn Hon Hai, Winstron and Pegatron. The domestic ones included Lava, Micromax, Padget Electronics, UTL Neolyncs, and Optiemus Electronics. Earlier in June, the Ministry of Electronics and Information Technology launched three PLI schemes for large scale electronics manufacturing, with an overall outlay of ₹50,000 crore.
Product lines supported in the sectors:
- ACC Battery Manufacturing — ACC batteries
- Electronic/Technology products — Semiconductor fab, display fab, laptop/notebooks, servers, IoT devices, specified computer hardware
- Telecom products — Core Transmission Equipment, 4G/5G, Next Generation Radio Access Network and Wireless Equipment, Access & Customer Premises Equipment (CPE), Internet of Things (IoT) Access Devices and Other Wireless Equipment, Enterprise equipment: Switches, Router
- Solar PV — Solar PVs