By 2025, the PLI scheme has attracted ₹2 lakh crore in investments and generated 12.6 lakh jobs, rapidly reshaping India’s industrial landscape.

Rationale of the PLI Scheme

1. Neutralising cost disabilities: It effectively offsets India's 11 to 14 percent manufacturing cost disadvantage compared to China.
2. Achieving self-reliance: The scheme strategically reduces critical import dependencies in vulnerable sectors like active pharmaceutical ingredients (APIs).
3. Spurring tech transfer: Incentivising frontier technologies directly contributed to India ranking 38th in the Global Innovation Index 2025.
4. Economies of scale: It aggressively shifts domestic manufacturing from fragmented operations to globally competitive, mega-scale production capabilities.

Achievements of the Scheme

1. Export surge: Cumulative exports under the scheme crossed ₹7.5 lakh crore by mid-2025, heavily driven by electronics.
2. Electronics boom: Smartphone exports to the US alone hit $30.13 billion in 2025, with domestic production scaling massively.
3. Domestic value addition: The pharmaceutical sector achieved an 83.7 percent value addition by March 2025, substituting bulk drug imports.
4. Telecom self-sufficiency: India achieved a 60 percent import substitution rate by FY 2025, gaining self-reliance in GPON equipment.
5. MSME integration: Overcoming "superficial assembly" critiques, 176 MSMEs were successfully onboarded as direct beneficiaries by late 2025.

Improving Functioning and Outcomes

1. Accelerating disbursement: The ICRA Report (2025) predicts only 16 percent budget utilisation by FY 2026; clearing administrative bottlenecks is vital.
2. Upfront capital subsidies: The IEEFA Report (2025) recommends upfront support for heavy-gestation sectors like solar PV, rather than just post-production incentives.
3. Policy stability: The recent Asandas & Sons High Court dispute highlights the need to avoid retroactive incentive cuts and ensure legal certainty.
4. Transitioning to PLI 2.0: Future iterations must mandate component-level manufacturing rather than final-stage assembly to deepen domestic supply chains.
5. Demand-side synergy: Integrating supply-side PLI with schemes like PM E-DRIVE (for EVs) creates assured domestic markets for manufacturers.
6. Trade facilitation: Linking PLI outcomes with the Export Promotion Mission (2025) will help MSMEs navigate global supply chain logistics.

By shifting towards a stable PLI 2.0 framework focused on deep value addition, India can cement its position as a resilient node in the global "China Plus One" strategy.