Performance Linked Incentives (PLI), the alchemy designed to boost domestic manufacturing by India has shown results though tepid. PLI has been structured to support 14 sector, and there are positive outcomes across 8 of these sectors. PLI disbursement in the remaining 6 is yet to begin. Of the 8 where there has been a positive impact of PLI the disbursement has been around $350mn which indicates the there is further potential to be achieved.
The government has started taking cognizance and is reviewing the PLI structure seriously. An overhaul of the existing PLI scheme may be round the corner making Make in India a lot more attractive. Caliberating policies to enhance manufacturing attractiveness can definitely not be one time act.
PLIS is fabulous as far its intentions and what they are programmed to achieve. But a tiered structured could have morphed its attractiveness to a level of rapid and real transformation.
When it come to electronics and specifically mobile phones, this is the space where PLI led disbursement of incentives have taken place at some scale.
But the conditions for DVA of around 29-30% could be onerous right at the onset. Even China at its peak could achieve ~50%. When it comes to IPhone, the three vendors of Apple in India have just been able to make headway with chargers, cables and PCBAs. It will be sometime where the domestic ecosystem will be able to support localization at a scale. But overall these are steps in the right direction.