Impact Assessment of PLI Schemes

Impact Assessment of PLI Schemes:

NITI Aayog, with IIM Ahmedabad as its knowledge partner, has published a mid-course report titled “Impact Assessment of PLI Schemes”. It evaluates all 14 Production Linked Incentive (PLI) schemes on four outcomes: investment, production, employment and exports.

• PLI schemes have strengthened India’s manufacturing ecosystem, mobilising ₹2.40 lakh crore in investments, generating ₹22.66 lakh crore in production and creating 8.49 lakh jobs across 14 sectors as of March 2026.
• Key challenges include low employment generation, limited domestic value addition and uneven sectoral performance. Strengthening demand, local supply chains and Centre-State coordination is essential for achieving Viksit Bharat @2047.

Key Highlights of the “Impact Assessment of PLI Schemes”:

• The report utilizes a 50% threshold of full-tenure targets as a mid-course benchmark to evaluate the schemes.
• Cumulative investment reached Rs 2.40 lakh crore, achieving 76% of the full-tenure target of Rs 3.15 lakh crore.
• Cumulative production/sales stood at Rs 22.66 lakh crore, achieving 64% of the full-tenure target of Rs 35.37 lakh crore.
• Cumulative employment reached 8.49 lakh jobs, representing 28% of the full-tenure target of 30.19 lakh jobs.
• The 14 PLI schemes have completed 58% of their aggregate implementation period, with 42% of the implementation period still remaining.
• Cumulative disbursement stood at Rs 35,354 crore as of March 2026, accounting for 18.51% of the total financial outlay of Rs 1.91 lakh crore.
• Incentives are released based on the fulfilment of prescribed investment and production conditions, rather than upfront.
• Employment generation may take longer because manufacturing investments are followed by capacity commissioning, production ramp-up and expansion of commercial operations.
• Sector-Wise Performance of PLI Scheme
  • Nearly 70% of targeted PLI segments are broadly on track, with particularly strong outcomes in electronics, telecom and pharmaceuticals, although performance varies across sectors.
  • Large Scale Electronics Manufacturing (LSEM) PLI scheme has emerged as one of the most efficient schemes in terms of resource utilisation and output generation, with mobile exports rising nearly nine-fold to Rs 2 lakh crore in FY2025 and imports declining by 77%.
  • It has strengthened domestic manufacturing and paved the way for the Electronics Component Manufacturing Scheme and the Mobile Phone Manufacturing Scheme to deepen domestic value addition.
    Pharmaceutical:
    • Bulk Drugs: The PLI Scheme for Bulk Drugs has strengthened domestic API manufacturing and reduced import dependence, helping India transition from a Rs 1,930 crore trade deficit (FY2021–22) to a Rs 2,280 crore surplus (FY2024–25).
    • It has created 55,000 MT manufacturing capacity across 26 critical APIs.
    • Chemical synthesis-based products remain the strongest performers. The scheme has also boosted investment, exports, employment and pharmaceutical self-reliance.
    • Manufacturing of Medical Devices: The PLI Scheme for Medical Devices has boosted domestic manufacturing of high-value medical equipment, including MRI machines, CT scanners, LINACs, cardiac implants and dialysers, reducing import dependence.
    • Pharmaceutical PLI Scheme: The PLI Scheme for Pharmaceuticals (Rs 15,000 crore outlay) has attracted over Rs 45,000 crore in investments through 55 approved applicants and enabled domestic manufacturing of 191 pharmaceutical products for the first time. Pharmaceutical exports increased 32.7%, from USD 19.46 billion (2021) to USD 25.82 billion (2025).
    • Large firms contributed 61% of total production, while MSMEs and mid-sized firms recorded moderate growth.
  • PLI Scheme for IT Hardware 2.0: It aims to expand India’s electronics manufacturing beyond mobile phones.
    • The earlier IT Hardware 1.0 underperformed due to low incentives (1–4%, averaging 2%) and stringent localisation requirements. The revised scheme offers approximately 5% average incentives.
    • Telecom & Networking Products: The Telecom PLI Scheme has strengthened domestic 4G/5G equipment manufacturing, with telecom exports growing at 1.5% AAGR and imports declining by 18.5% average annual growth rate (AAGR) (FY21–FY25).
    • It provides an additional 1% incentive for design-led manufacturing.
  • Automobile and Auto Components: The PLI Scheme for Automobiles and Auto Components is accelerating India’s transition towards electric mobility and advanced automotive technologies.
    • Vehicle exports increased 33.2%, from USD 18.9 billion (2021) to USD 25.16 billion (2025).
    • The scheme mandates 50% Domestic Value Addition (DVA) and follows an open-to-all approach.
  • Advanced Chemistry Cell (ACC) Battery: The PLI Scheme for ACC Batteries aims to build domestic battery manufacturing capacity for electric mobility and energy storage.
    • However, progress is severely delayed due to stringent localisation norms, long gestation period, technology gaps and dependence on critical minerals.
  • Drones & Drone Components: The Drone PLI Scheme has boosted domestic drone manufacturing, with sector turnover increasing seven-fold. It has disbursed 77.5% of its outlay, strengthening India’s indigenous drone manufacturing and component ecosystem.
  • Textile Products:
    • The PLI Scheme for Technical Textiles has boosted high-value manufacturing, with imports declining by 49.4% and exports increasing by 59% (2021–2025).
      However, fund utilisation remains low at 3.61%, partly due to high eligibility thresholds and rigid HSN codes.
    • White Goods: The PLI Scheme for White Goods has boosted domestic manufacturing and localisation of AC and LED components.
      Compressor manufacturing capacity increased ten-fold, from 1 million units (2021) to 10 million units (2025–26), while investments across 18 states strengthened the domestic supplier ecosystem. However, low incentive disbursement remains a concern.
  • High Efficiency Solar PV Modules: The PLI Scheme for High-Efficiency Solar PV Modules has accelerated India’s solar manufacturing, with 21% of domestic capacity creation directly attributable to the scheme and declining module imports.
    • It has promoted integrated manufacturing across polysilicon, wafers, cells and modules.
      However, technology gaps, volatile global prices and dependence on concentrated international supply chains remain key challenges.
  • Food Products: The PLI Scheme for Food Processing has boosted sectoral growth, with sales rising to Rs 1.09 lakh crore in FY2025–26, generating 3.29 lakh jobs and creating 35 lakh MT annual processing capacity.
    • It has strengthened agricultural value chains and supply chains. However, weak global branding support and limited evidence of creating globally competitive firms remain concerns.
  • Speciality Steel: The PLI Scheme for Specialty Steel aims to boost domestic production of high-value steel for automobiles, defence, energy and infrastructure.
    • It covers 67 applicants across 21 sub-categories, with production showing an upward trend. However, frequent policy revisions, implementation delays and production below expectations remain key concerns.