The government’s production-linked incentive (PLI) scheme, aimed at promoting domestic manufacturing under the Make in India initiative, has witnessed significant progress in supporting micro, small, and medium enterprises (MSMEs). As of the latest update, the PLI scheme has approved 733 applications from manufacturers across 14 sectors, benefiting 176 MSMEs in areas such as bulk drugs, medical devices, pharma, telecom, white goods, food processing, textiles, and drones. This marks a considerable increase from the previous count of over 100 MSME beneficiaries by the end of December 2022, as reported in the Economic Survey for 2022–23.
Notably, the drone sector has experienced a seven-fold increase in turnover attributed to the PLI scheme, which includes all MSME startups. Additionally, the PLI scheme for food processing has resulted in a significant rise in sourcing raw materials from India, benefiting Indian farmers and MSMEs. The Ministry of Commerce highlighted these positive impacts in a statement issued during the event.
The PLI schemes were introduced to foster self-reliance in manufacturing and have targeted 14 sectors with a combined incentive outlay of approximately $26 billion. Rajesh Kumar Singh, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), noted that the PLI schemes have contributed to a notable 76% increase in foreign direct investment (FDI) in the manufacturing sector, amounting to $21.34 billion in FY22 compared to $12.09 billion in FY21.
Several sectors covered by the PLI schemes have witnessed significant growth in FDI inflows between FY22 and FY23. These include drugs and pharmaceuticals with over 46% growth, food processing industries with more than 26% growth, and medical appliances with over 91% growth.
Out of the expected investment of Rs. 3.65 lakh crores across the 733 approved applications, actual investments of Rs. 62,500 crores were realized by March 2023. This has led to incremental production or sales worth more than Rs. 6.75 lakh crores and the generation of approximately 3.25 lakh jobs, according to the Ministry.
During an event in October 2022, Commerce Minister Piyush Goyal emphasized that MSMEs are the true beneficiaries of the PLI scheme, as the establishment of large industries brings along an ecosystem of manufacturers and service providers. Goyal emphasized that MSMEs are the backbone of India’s economy, and their growth is facilitated by the opportunities provided by the larger industries.