New Delhi:
There was a time when a large part of India’s foreign capital was spent on importing mobile phones. Import of electronics goods was worth thousands of crores of rupees. Most of the mobile phones used in India were imported. A large part of India was dependent on imports in pharma and food processing. But during the Covid period, a government scheme made a revolution in these big areas.
This scheme is PLI or Production Linked Incentive. Its objective was to promote manufacturing in India. The plan was specifically made keeping in mind some areas where there was a need to increase manufacturing, so that jobs could be created at the domestic level, investment could increase and government revenue could increase. In fact, during the Covid period, it was realized that most of the countries including India are dependent on a single country for the import of important electronic hardware and components. When the supply chain was disrupted due to Covid restrictions, a need was felt to rapidly promote domestic manufacturing.
This scheme, launched in April 2020, was first implemented in three areas. Manufacture of mobile phones and their parts, electric components and medical equipment. Later it was also implemented in 14 areas. Under this, many types of concessions are given by the government to domestic and foreign companies for manufacturing in India. It is given four to six percent on their revenue for up to five years.
Now that it has been more than four and a half years since the PLI scheme was launched, its wide-ranging and impactful impact on India’s manufacturing sector is being directly felt.
There are 755 beneficiary companies of PLI schemes and an investment of Rs 1.46 lakh crore has been made till August in the 14 sectors covered under it. In terms of sales, production has increased by Rs 12.5 lakh crore and about 10 lakh people have got employment.
If we talk about three big sectors, more than Rs 4 lakh crore has been exported from them. Exports through production linked incentive (PLI) schemes have crossed Rs 4 lakh crore, with key sectors like electronics, pharmaceuticals and food processing contributing significantly.
In the electronics sector, India has become a net exporter of mobile phones. Mobile phone manufacturing now accounts for half of India’s total production, with exports increasing 3 times from FY 2020-21.
India is now the third most important country in the world in drugs and pharmaceuticals in terms of quantity. The pharmaceutical industry has revived domestic production of bulk drugs and complex generic drugs, thereby reducing dependence on imports. Technology transfer has taken place for critical equipment such as CT scanners in the medical device industry, boosting local production.
In the telecom sector, India has become an exporter of 4G and 5G telecom equipment within three years of inception of PLI. In the automobile sector, global industries have introduced electric vehicles with substantial investment in the country. The food processing sector contributed to sustainable agricultural practices and production of millets and organic products. There has been seven times increase in business due to MSEMs and startups in emerging areas like drones. Solar PV modules and special steel industries are also seeing strong growth with significant investment and local production.
revolution in telecommunication sector
The telecom PLI scheme has attracted investments of Rs 3,400 crore in the first three years of its launch, showing a growth of 370 per cent compared to the base year of FY 2019-20. Telecom equipment production has crossed the milestone of Rs 50,000 crore, while exports have reached nearly Rs 10,500 crore.
This achievement has created more than 17,800 direct jobs and many indirect employment opportunities, underscoring the strong growth and competitiveness of India’s telecom manufacturing sector. Let’s look at some important figures-
India, which produced 5.8 crore mobile phones and imported 21 crore units in 2014-15, is expected to manufacture 33 crore phones domestically in 2023-24. Mobile phone exports to increase from Rs 1,556 crore in 2014-15 to Rs 1,28,982 crore in 2023-24. In the last five years, trade deficit in telecom has reduced from ₹68,000 crore to ₹4,000 crore.
PLI has helped in achieving a new milestone in smartphone production. The Smartphone PLI scheme has become a major source of revenue for the government, earning 19 times more than the distribution of incentives under the scheme in the last four financial years.
The smartphone manufacturing industry contributed Rs 1.10 lakh crore to the government exchequer. Goods worth Rs 12.55 lakh crore were produced between FY 2021 and FY 2024, during which the government distributed Rs 5,800 crore as incentives. This means that the government earned revenue of Rs 1,04,200 crore after PLI distribution. During this period many major milestones were achieved.
For example, the industry paid duty of Rs 48,000 crore on mobile parts and components in four years, while incremental GST generated Rs 62,000 crore. After the launch of this scheme, the mobile phone industry has created approximately 300,000 direct jobs and 600,000 indirect jobs in the smartphone ecosystem.
The scheme also makes the industry the largest employment generator and skill source for women in middle-skilled, blue-collar jobs. Cumulative exports of smartphones during the four-year PLI period reached Rs 2,87,000 crore. This has made smartphone exports the third largest individual commodity from 23rd place in FY19 at the end of last fiscal.
It is estimated that India will soon produce all the mobile phones used domestically. Apple, Google and Samsung are making their new models in India. Many Chinese companies are also now producing their mobile phones in India. India, which once imported most of the smartphones, is now importing only 3 percent of the smartphones.
Prime Minister Narendra Modi has given the slogan of self-reliant India. PLI scheme is becoming a big factor in implementing it. It has contributed to India’s growth. However, some experts believe that there is a need to bring more transparency in this. Also, emphasis was given on value addition along with assembly in mobile manufacturing, which the government later paid attention to.
