Page 75 - Edelweiss India Conference 2022 FLIPBOOK

New Energy Digital Manufacturing Capital Markets Human Capital

Specialty chemicals: Government pushing exports

30000

25000
20000

15000

10000
So far, the scheme has
5000 been rolled out for

0 manufacture of mobile
2012-13 2018-19 2023-24 and allied equipment,
Export (Organic, inorganic and agrochemical) pharmaceutical
Source: Edelweiss Research, DGCI ingredients and
medical devices
PLI: Accelerating India’s manufacturing journey

In order to boost domestic manufacturing and cut down on import bills, the Indian government
introduced a Production-Linked Incentive (PLI) Scheme in March 2021. The scheme earmarks
incentives for companies on incremental sales from products manufactured at domestic units.
It promises the incentives to foreign companies as well to set shop in India. All in all, the scheme
encourages local companies to set up or expand existing manufacturing units and foreign companies
to invest in India’s manufacturing sector.

So far, the scheme has been rolled out for manufacture of mobile and allied equipment,
pharmaceutical ingredients and medical devices. These sectors are labour-intensive, and the hope
is that they would create new jobs for the country’s ballooning employable workforce.
PLI scheme: A lowdown

•

•
• To acknowledge the relevance of exports in overall growth strategy, but focus more on
domestic market
•
investments, both from within and without

What this means for electronics manufacturing?

PLI to trigger front-ending of investments; Targeting 4x growth in
EMS manufacturing to ~USD52bn by FY26E

The PLI initiatives are likely to attract INR9bn into electronics manufacturing supply chain

and a solid domestic market will provide economies of scale, enabling local plants’ entry
into the global supply chain—along similar lines like we saw in the auto industry.

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