Production Linked Incentive (PLI) Scheme Explained: India’s big bet on Industry Incentives

ANI

Foxconn, one of the largest contract manufacturer of Apple Products, has committed $1.5 billion to expand its operations in India — likely to ramp up iPhone production as Apple shifts away from its reliance on China. During Apple’s Q1 2025 earnings call, CEO Tim Cook identified India as the primary source for iPhones destined for the U.S. market in the upcoming quarter—marking a significant shift in Apple’s global supply chain strategy. Besides Foxconn, many foreign manufacturers have tapped into India’s Production-Linked Incentive (PLI) scheme, which offers financial incentives for boosting domestic production and exports.  Launched as global firms sought to diversify away from China under the "China+1" strategy, the scheme has become a key driver of India’s manufacturing-led growth. "In addition to promoting large-scale electronics manufacturing, India’s Production Linked Incentive (PLI) scheme spans a diverse set of industries, including those critical to national security—such as Pharmaceuticals, Medical Devices, Telecom & Networking equipment, and Semiconductors."

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00:00Foxconn, one of the largest contract manufacturers of Apple products,

00:07has committed $1.5 billion USD to expand its operations in India,

00:12likely to ramp up iPhone production as Apple shifts away from its reliance on China.

00:16During Apple's Q1 2025 earnings call, CEO Tim Cook identified India as the primary source

00:26for iPhones destined for the US market in the upcoming quarter,

00:30marking a significant shift in Apple's global supply chain strategy.

00:36Besides Foxconn, many foreign manufacturers have tapped into India's Production-Linked Incentive

00:42scheme, which offers financial incentives for boosting domestic production and exports.

00:48In addition to promoting large-scale electronics manufacturing,

00:51India's Production-Linked Incentive scheme spends a diverse set of industries,

00:55including those critical to national security, such as pharmaceuticals,

01:00medical devices, telecom and networking equipment, and semiconductors.

01:08The PLI has been enormously successful. It's appropriately called the large-scale

01:14electronic manufacturing PLI because it has taken mobile phone manufacturing from

01:202 lakh-odd crores to more than 5 lakh crores. So it has been enormously successful.

01:29India is rapidly emerging as a global manufacturing hub, powered by the Production-Linked Incentive

01:34scheme launched in 2020 under the self-reliant India vision.

01:39By offering 4% to 6% subsidies on incremental sales across 14 key sectors, including electronics,

01:46pharma, and automobiles, the scheme is attracting major players like Apple and Samsung.

01:51With $2.67 billion USD earmarked for electronics alone, India is positioning itself to capture a

01:58significant share of the $1.5 trillion global market. As of November 2024, the PLI scheme had approved

02:06764 applications, including 176 from MSMEs, generating $18.72 billion USD in investment and $162.84 billion USD in production.

02:20This momentum aligns with the global China Plus One strategy, as companies diversify supply chains away

02:26from China. India is seizing the shift as a golden opportunity, using targeted incentives and a strong

02:33policy push to transform into a global manufacturing powerhouse.

02:40Every country and every industry started thinking of China Plus One about 10 years back.

02:47And every country started giving some incentives, some facilities. India also worked upon an incentive

02:54called PLI, which is Production-Linked Incentive. This scheme is very unique

02:59and perhaps not available in many countries or any countries, if I can say.

03:09India is rapidly emerging as a key player in the global technology supply chain, driven by initiatives

03:15like the Production-Linked Incentive Scheme. In the telecom and networking product segment alone,

03:20cumulative sales have reached $9.48 billion, with exports making up 18.6%.

03:25The scheme has also created over 26,000 jobs.

03:30Void by this success, the government has expanded the scheme to include 11 more telecom and networking

03:36products, offering broader opportunities for performance-based incentives.

03:40Looking beyond smartphones, India is targeting high-value sectors such as semiconductors, batteries,

03:46and drones. With cost advantages, technical talent, and strong policy support,

03:51India is well-positioned to drive sustained economic growth and support global supply chain diversification.

04:02In 2014 or 2015, the question used to be, who is manufacturing in India?

04:07But after the reforms and after the schemes, today the question is, who is not manufacturing in India?

04:16India's transformation into a global manufacturing hub is no longer aspirational. It's underway.

04:26With robust policy support, rising exports, and major global players investing under the PLI scheme,

04:33India is firmly positioning itself as an indispensable pillar of the global electronics and tech supply chain.

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