Production Linked Incentive

In one line: PLI schemes pay companies a percentage of their incremental sales over a base year, to attract large-scale manufacturing in selected sectors.

How it works

Firms that meet investment and sales thresholds receive an incentive on sales above a base year for a fixed period. This rewards scale and output rather than just investment.

Where it began

PLI started in 2020 with large-scale electronics manufacturing, mainly mobile phones, and was extended to many sectors including pharmaceuticals, auto components and specialty steel.

Results and criticism

By March 2026, PLI schemes had attracted more than ₹2.40 lakh crore of investment, and mobile phone exports grew sharply. Critics point to low domestic value addition in assembly, slow disbursement in some sectors, and the risk of paying subsidies for production that might have happened anyway.

Where to go next

• Premature deindustrialisation: Why services grew before factories did
• Global value chains: Where India fits in making things