A few months back I had written two notes, a) Incentivizing Electronic Manufacturing – Opportunities & Challenges; b) Is “Make-in-India Working? These two notes are closely linked with each other. The former explains the background of the new PLI scheme (notified on 1st April 2020), and the latter explains the urgency of such a scheme. For easy reference, I am reproducing portions of the conclusions of the above-mentioned notes here.
Incentivizing Electronic Manufacturing – Opportunities & Challenges
There is no doubt that India had been spending a lot of money on incentivizing local manufacturing. But it is also a fact that the same hasn’t been able to motivate the companies on the ground to make sufficient investments in brick and mortar, i.e to develop R&D, design capabilities, and development of the component ecosystem in India. The reasons – most of these existing schemes allowed the companies to take the incentives without having to make such commitments. Now, it is a different matter that some of these commitments would have got challenged in the WTO, thereby forcing us to unwind them later.
