Auto, battery and specialty steel manufacturers in India will receive production-linked incentives (PLI) for a period of five years according to a scheme approved by the Indian Cabinet to enhance the country’s manufacturing sector and drive exports. The Indian government has approved a financial outlay of Rs14.598 trillion ($195.85bn) to be utilized in 10 key sector over the next five years to boost Indian manufacturers’ competitiveness in the global market. The funding through PLI scheme will be sanctioned by the ministries governing the sectors.
The biggest chunk of the funding will benefit the auto sector, followed by advance battery makers, telecom manufacturers and food processing industry. Development and increase of production in these sectors will in turn improve steel demand in India.
PLI scheme aims to boost manufacturing sector by attracting investments to increase core competency and adopt advanced technology, increase efficiencies and create economies of scale, thereby enhance exports and increase India’s share in the global supply chain.
The 10 key sectors that will receive production-linked funding are ACC battery, electronic/technology products, automobiles & auto components, pharmaceuticals drugs, telecom & networking products, textile products, food products, high efficiency solar PV modules, white goods (Acs & LED) and speciality steel.
India’s steel industry, through the Ministry of Steel, will receive Rs6322mn ($848mn) as funds to increase its competency in the specialty steel segment, increase manufacturing capabilities and exports of value-added steel.
The scheme has prioritized funding for;
* Coated steel,
* High strength steel,
* Steel rails,
* Ally Steel bars & rods.
Given the status of India’s automotive sector as a major contributor to the country’s GDP, the government has approved funding Rs570.42bn under PLI scheme, aimed to increase India’s prowess in the global automobile and auto component space.
PLI scheme will provide funding of Rs181bn for Advance Chemistry Cell (ACC) Battery manufacturers, which is a emerging sector in the electronics, electric vehicles (EV), and renewable energy space. The scheme will incentivize large domestic companies as well as international manufacturers setting up ACC battery units in India.
To usher Indian manufacturers into the top telecom and network equipment OEM club, the PLI scheme has outlaid Rs121.95bn to attract investments from multinational companies to help domestic companies increase production and exports. The fund will focus on manufacturing of core transmission equipment, 4G/5G, Next Gen Radio Network and wireless Equipment and focus on CPE, Internet of Things (IoT), access devices, switches and routers. These investments in telecom products manufacturer will cater to the demand generated by Indian government’s push for IoT, data localization and Smart City & Digital India programs.
Beside, these the government has also earmarked Rs409.51bn for funding manufacturing of mobile and specified electronic components through previously announced PLI programs.
Domestic manufacturing of air conditioners and LEDs to cut import, beside creating domestic value addition and increasing exports. The sector will received funds to the tune of Rs62.38bn.