PLI Scheme: India Inc. Sees Incentives Boosting Manufacturing Of Battery To Steel
Gear wheels sit in a rack of an automotive component manufacturing plant in Chakan, Maharashtra, India. (Photographer: Dhiraj Singh/Bloomberg)

PLI Scheme: India Inc. Sees Incentives Boosting Manufacturing Of Battery To Steel

Foreign and domestic manufacturers are expected to firm up existing plans to set up units once details of the production-linked incentive scheme are out.

The government on Wednesday announced it will offer incentives to 10 sectors in a push to make India a manufacturing hub, and create jobs in the economy marred by the deadliest virus.

The scheme would offer incentives for five years to manufacturers of advance chemistry cell battery, electronics, automobile and auto components, pharmaceuticals, telecom and networking products, textiles, food products, solar modules, white goods and specialty steel, according to a government statement. The approved expenditure over the five-year period would be Rs 1.45 lakh crore.

The scheme will accelerate existing plans of companies who are considering to invest in India to cater to the local demand, said Anand Ramanathan, partner-food and consumer segment at Deloitte India.

Uday Kotak, president of industry body CII said in a statement, that the PLI scheme identifies the right sectors and products across core industries, labour-intensive manufacturing, and export-oriented sectors as well as advanced technology products. It will help India to become a global manufacturing hub, Kotak said. “The policy is strategically targeted and will go a long way to boost production, make Indian goods competitive and expand exports as part of global value chains.”

According to Abhishek Jain, partner at EY India, a host of other benefits such as lower income tax for new manufacturing units set up under a new company, state-specific incentives, customs duty benefits on import of capital goods, along with production-linked incentives, would make manufacturing in India attractive. The scheme might see a great response as in the case of mobile manufacturers, he said.


The highest amount of Rs 57,042 crore has been allocated for providing incentives to the automobile and auto components industry.

The outlay will encourage the industry to become a net exporter and help reduce import dependence, said Deepak Jain, president of Automotive Component Manufacturers Association of India. “While the auto component industry exports over 25% percent of its production, our ambition is to capture a significant proportion of global trade.”

India imports high-end technology parts such injectors, EV components for manufacturing automobile, and if the PLI scheme focuses on providing incentive to such manufacturers, it will allow them reach economies of scale, said Gaurav Vangaal, associate director at IHS Markit. The scheme should also incentivise car exports which will give big push to car manufacturing, and cater to global demand, he said.

The government has allocated an additional Rs 18,100 for advance chemical cell batteries. Dipti Lavya Swain, partner at HSA Advocates, called it a shot in the arm for India’s automobile and electric vehicle industry.

“Since battery is a key component of EVs, establishing a battery manufacturing base in the ever-growing Indian economy, aided by a linked government subsidy, will provide the economies of scale that global and domestic companies always look towards," Swain told BloombergQuint.

Food Processing

Bringing food processing industry under the PLI scheme would “revolutionise” the sector, Adi Godrej, chairman of Godrej Group, said in a statement by industry body CII.

Godrej said India processes only 7% of the total farm producer despite being world’s leading producer of fruits, vegetables and milk. “The PLI scheme would help attracting more investment into the sector, both domestic and foreign investment.”

The allocation made by the government for the sector is Rs 10,900 crore, and would cover ready to eat food products, marine products, fruits and vegetables, honey, ghee, mozzarella cheese, organic eggs and poultry meat.


The scheme allocates Rs 6,322 crore for incentivising production of specialty steel. India, a net exporter of finished steel, has the potential to become a champion in certain grades of steel, the government said in a statement. The PLI scheme will help in enhancing manufacturing capabilities for value-added steel leading to increase in total exports.

The scheme will prove to be a gamechanger and help achieving the goal of India becoming a champion in certain grades of steel while enhancing manufacturing capabilities for value-added steel, leading to increase in total exports, TV Narendran, managing director at Tata Steel, said in a statement.

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