Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing

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Dated: 12.03.2026

Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing

The Ministry of Electronics and Information Technology (MeitY) introduced the Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing on April 1, 2020, to boost domestic manufacturing and attract large investments in the electronics value chain. This initiative is part of India’s broader strategy to position itself as a global hub for Electronics System Design and Manufacturing (ESDM), as outlined in the National Policy on Electronics (NPE 2019).

Background

Electronics manufacturing in India has grown at a CAGR of 25% over the last four years, with domestic production increasing from INR 1,90,366 crore (USD 29 billion) in 2014-15 to INR 4,58,006 crore (USD 70 billion) in 2018-19. Despite this growth, India’s share in global electronics manufacturing remains modest, increasing from 1.3% in 2012 to 3.0% in 2018. With domestic demand for electronics hardware expected to reach INR 26,00,000 crore (USD 400 billion) by 2025, the PLI Scheme aims to address challenges such as high capital investment requirements, rapid technological changes, and manufacturing disabilities compared to other economies.

Objective

The PLI Scheme provides financial incentives ranging from 4% to 6% on incremental sales of goods manufactured in India, targeting mobile phones and specified electronic components. The scheme aims to:

Boost domestic manufacturing.
Attract large investments in the electronics value chain.
Reduce dependency on imports and foreign exchange outflow.

Key Features of the PLI Scheme 

1. Quantum of Incentive 

The scheme offers 4% to 6% incentives on incremental sales of goods manufactured in India over the base year for a period of five years.

2. Target Segments

The scheme focuses on:

Mobile Phones (with invoice value INR 15,000 and above, and domestic companies).
Specified Electronic Components, including SMT components, discrete semiconductor devices, passive components, PCBs, sensors, System in Package (SIP), MEMS/NEMS, and ATMP units.

3. Eligibility Criteria

Companies must be engaged in manufacturing target segments in India, including contract manufacturers.
Eligibility is subject to thresholds of incremental investment and incremental sales of manufactured goods.
Domestic companies are defined as those owned by resident Indian citizens, with more than 50% of capital beneficially owned by Indian citizens or companies.

4. Tenure

The scheme will provide support for five years starting from August 1, 2020, with FY 2019-20 as the base year for calculating incremental sales and investment.

5. Incentive Outlay

The total incentive outlay for the scheme is INR 40,951 crore over five years:

Year 1: INR 5,334 crore
Year 2: INR 8,064 crore
Year 3: INR 8,425 crore
Year 4: INR 11,488 crore
Year 5: INR 7,640 crore

6. Approval and Disbursement Process 

Applications are open for four months initially, with the possibility of extension or reopening during the scheme’s tenure.
Eligible applications are appraised and approved by an Empowered Committee (EC), which includes key government officials such as the CEO of NITI Aayog and secretaries from various ministries.
Incentives are disbursed based on verified claims submitted by approved applicants.

7. Nodal Agency

The scheme is implemented through a Project Management Agency (PMA), responsible for appraising applications, verifying eligibility, and managing disbursement claims.

8. Amendments and Revisions

The EC is authorized to revise incentive rates, ceilings, target segments, and eligibility criteria during the scheme’s tenure.

Second Round of PLI Scheme 

In response to industry demand, MeitY reopened the PLI Scheme for a Second Round of applications, with the following revisions:

Application Window: Open until March 31, 2021, with possible extensions.
Target Segment: Focus exclusively on Specified Electronic Components.
Incremental Investment Thresholds: Revised to INR 25 crore over four years.
Incremental Sales Thresholds: Revised to INR 15 crore in Year 1, increasing to INR 100 crore by Year 4.
Incentive Rates: Year 1: 5%, Year 2: 4%, Year 3: 4%, Year 4: 3%.
Eligibility: Companies approved under the First Round cannot apply for the Second Round, except for group companies with minority or non-controlling interest.

Exports Stats

Bar graph illustrating export starts from 2023 to 2025, comparing different sectors and their growth percentages.

Stats Post PLI

3D bar chart comparing production and export of items in 2014-15 and projected figures for 2024-25, highlighting significant growth in mobile exports.

Press Release by PIBDownload

Application Process

1. Submission

Applications must be submitted through an online portal or physically to MeitY. A non-refundable application fee of INR 1,00,000 is required.

2. Evaluation

Applications are appraised by the PMA, which verifies eligibility and makes recommendations to the EC. The EC then approves applications based on criteria such as global manufacturing revenue and incremental investment thresholds.

3. Disbursement

Approved applicants can claim incentives quarterly, half-yearly, or annually. Claims must be submitted within nine months of the financial year-end. Disbursements are made via Direct Bank Transfer or other approved mechanisms.

Conclusion

The PLI Scheme for Large Scale Electronics Manufacturing is a transformative initiative aimed at making India a global leader in electronics manufacturing. By providing financial incentives and addressing key industry challenges, the scheme is expected to attract significant investments, boost domestic production, and reduce reliance on imports. With the Second Round of applications now open, the scheme continues to evolve, offering new opportunities for companies to contribute to India’s vision of becoming a global electronics hub.

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Source: Meity, PIB

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