PLI Budget Increased for Key Sectors to Strengthen Manufacturing

India’s manufacturing sector is experiencing an exceptional transformation, backed by government policies aimed at strengthing the nation to global manufacturing leadership. At the heart of this revolution is the Production Linked Incentive (PLI) Scheme, a strategic initiative launched by the government to bolster innovation, improve efficiency, and boost competitiveness across key industries.

A Vision for a Global Manufacturing Powerhouse

The Government of India has dramatically increased budget allocations for several crucial sectors under the PLI Scheme in 2025-26 to accelerate industrial growth. This surge in funding reflects the government’s firm commitment to strengthening domestic manufacturing.

Key sectors such as Electronics and IT Hardware, Automobiles and Auto Components, and Textiles have received significant budget boosts. For example, allocations for Electronics and IT Hardware have jumped from ₹5,777 crore in the revised estimates for 2024-25 to ₹9,000 crore. The Automotive sector has seen a massive increase from ₹346.87 crore to ₹2,818.85 crore, while the Textile sector’s allocation has surged from ₹45 crore to ₹1,148 crore.

Strategic Sectors Under the PLI Scheme

With a robust outlay of ₹1.97 lakh crore (over US$26 billion), the PLI Scheme focuses on 14 critical sectors. Each of these sectors is strategically selected to amplify India’s manufacturing capabilities, drive technological advancements, and bolster its position in the global market. The scheme is designed not only to strengthen domestic production but also to expand exports, aligning with the government’s broader vision of Atmanirbhar Bharat (Self-reliant India).

The 14 sectors covered under the PLI Scheme are:

1. Mobile Manufacturing and Specified Electronic Components
2. Critical Key Starting Materials/Drug Intermediaries & Active Pharmaceutical Ingredients
3. Manufacturing of Medical Devices
4. Automobiles and Auto Components
5. Pharmaceutical Drugs
6. Specialty Steel
7. Telecom & Networking Products
8. Electronic/Technology Products
9. White Goods (Air Conditioners and LEDs)
10. Food Products
11. Textile Products: MMF Segment and Technical Textiles
12. High-Efficiency Solar PV Modules
13. Advanced Chemistry Cell (ACC) Battery
14. Drones and Drone Components

FDI Reforms and Their Role

Alongside the PLI Scheme, the Indian government has introduced a series of liberalised Foreign Direct Investment (FDI) reforms, designed to attract global investments and bolster manufacturing capabilities. Between 2019 and 2024, FDI reforms included measures such as allowing 100% FDI under the automatic route in sectors like coal, insurance, telecom, and the space sector. These reforms have driven a surge in FDI equity inflow, with the manufacturing sector alone seeing a 69% increase, rising from USD 98 billion (2004-2014) to USD 165 billion (2014-2024).

Conclusion

The PLI Scheme is a cornerstone of India’s vision for a self-reliant and globally competitive manufacturing sector. With increased budget allocations, rising investments, and growing exports, the scheme is transforming key industries, reducing import dependence, and fostering innovation.

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