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India offers over $1 billion incentives to private firms for manufacturing, official reveals.

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In Short:

India has paid USD1.02 billion in incentives to boost local manufacturing under a production-linked incentive scheme (PLI), attracting over USD13 billion in investments from private firms. The scheme covers 14 sectors, including electronics and drones, and has drawn participation from major global and Indian companies. Mobile phone exports reached a record USD15 billion, and production in sectors like electronics and food processing has accelerated. Textile and specialty steel sectors may need adjustments.

India Invests USD 1.02 Billion to Boost Local Manufacturing

India has paid USD 1.02 billion as incentives to boost local manufacturing, following over USD 13 billion in investments from private firms under the 1.97-trillion-rupee (USD 24 billion) production-linked incentive scheme (PLI), a top government official announced on Wednesday.

Key Industrial Policy

The PLI scheme covers 14 sectors, ranging from electronic products to drones, and is a crucial part of Prime Minister Narendra Modi’s plans to promote India as a global manufacturing hub. The scheme has attracted participation from major global and Indian firms, including Apple, Foxconn, Samsung Electronics, Hindustan Unilever Ltd, and Reliance Industries.

Impact and Progress

The scheme has had a positive impact, with incentive disbursements increasing. Mobile phone exports reached a record USD 15 billion in the fiscal year that ended on March 31, industry estimates reveal.

The official also mentioned that production in sectors like mobile phones, electronics, and food processing has progressed rapidly. However, sectors like white goods and drones have also shown improvement. Some lag is observed in the textile and specialty steel sectors, indicating the need for tweaks in incentives.

Future Plans

While there are no immediate plans to expand incentives to other sectors, India regularly reviews the uptake of the scheme to ensure its effectiveness.

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