Production Linked Incentive (PLI) Scheme:

• In order to boost domestic manufacturing and cut down on import bills, the central government introduced a scheme that aims to give companies incentives on incremental sales from products manufactured in domestic units.
• The scheme aims to give companies incentives on incremental sales from products manufactured in domestic units. The scheme invites foreign companies to set units in India, however, it also aims to encourage local companies to set up or expand existing manufacturing units. Many of Apple’s key partners (global smartphone majors) joined PLI scheme.
• Initially, the scheme was introduced in Electronics manufacturing and Pharmaceutical industry. Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing notified on 1st April, 2020, extends an incentive of 4% to 6% on incremental sales (over base year) of goods under target segments that are manufactured in India to eligible companies, for a period of five years subsequent to the base year (FY2019-20).
• Recently, Cabinet approves PLI Scheme to 10 key Sectors for Enhancing India’s Manufacturing Capabilities and Enhancing Exports. These sectors are labour intensive and are likely, and the hope is that they would create new jobs for the ballooning employable workforce of India.
• The objective is really to make India more compliant with our WTO (World Trade Organisation) commitments and also make it non-discriminatory and neutral with respect to domestic sales and exports. PLI is compatible with World Trade Organization commitments as the quantum of support is not directly linked to exports or value-addition. This is unlike some of the earlier schemes like the Merchandise Exports from India Scheme (MEIS), which were challenged at the WTO.