Today, in India, PLI (Production Linked Incentive) is the talk of the town. It all started with cellular phones, and now the scheme is being systematically expanded to include many other verticals where India is looking towards expanding in-country manufacturing. The purpose of this note is to answer some simple questions – a) How did PLI come into being? b) What is needed to make it work? c) What is trying to achieve? And whether it has any remanence with the past GOI program called PMP (Phase Manufacturing Programme).
Phase Manufacturing Programme
India started its journey on the path of electronic manufacturing through a program called PMP (Phased Manufacturing Programme). The whole idea of this program was to make “imports costly” for those products that India wanted to manufacture locally. This was achieved through a mechanism called “duty differential”. Under this scheme, the components used for making the final product were allowed to be imported freely without attaching any cost (duties), till such time the next phase of the program got triggered which included some of these components as well into the purview of “duty differential”. Hence, there was a clearly defined plan laying out the roadmap of the components that would get embraced into this scheme sometime in the future. The snapshot of this roadmap embedded in Meity’s notification dated 28 April 2017 is listed below.
