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The Indian government will not expand the PLI Scheme beyond the 14 pilot sectors, two of the four government officials have informed Reuters. They also added that the production deadlines will not be extended, despite requests from several participating firms.
Roughly 750 firms, including Foxconnv and Reliance Industries had signed up for the Production Linked Incentive Scheme, as per public records, Reuters reported.
Firms were promised cash payouts if they met individual production targets and deadlines. The hope was to raise the share of manufacturing in the economy to 25% by 2025.
Instead, many firms that participated in the program failed to kickstart production, while others that met manufacturing targets found India slow to pay out subsidies, according to government documents and correspondence seen by Reuters.
This comes against the backdrop of US President Donald Trump’s latest tariff measures, set to kick in from April 2.
As of October 2024, participating firms had produced $151.93 billion worth of goods under the program, or 37% of the target that Delhi had set, according to an undated analysis of the program compiled by the commerce ministry. India had issued just $1.73 billion in incentives – or under 8% of the allocated funds, the document said.
Reuters could not elicit responses from Reliance and Foxconn.
Two of the government officials told Reuters the end of the program did not mean Delhi had abandoned its manufacturing ambitions and that alternatives were being planned. Fourteen of the 58 projects approved for PLIs have been withdrawn or removed due to lack of progress, according to the undated program-wide analysis, the newswire noted.
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