The Production Linked Incentive (PLI) Scheme is a government initiative, a concept and a performance-based incentive programme, launched in 2020 to boost domestic manufacturing and attract large investments in key sectors. Its origin is rooted in the need to address India's heavy reliance on imports in critical sectors and to position the country as a global manufacturing hub, aligning with the 'Make in India' and 'Atmanirbhar Bharat' missions. The scheme was initially launched in April 2020 for three sectors: mobile manufacturing and specified electronic components, pharmaceutical ingredients, and medical devices.
The core mechanism of the PLI scheme is to offer financial incentives, typically ranging from 4 percent to 18 percent, to eligible companies on their incremental sales of domestically manufactured products over a predetermined base year. The total outlay for the scheme is ₹1.97 lakh crore across 14 sectors, including automobiles, pharmaceuticals, textiles, electronics, and specialty steel. The scheme connects directly to the broader economic goal of enhancing India's global competitiveness and integrating it into global supply chains.
The scheme has seen recent changes, particularly in the Textile PLI Scheme for Man-Made Fibre (MMF) apparel, MMF fabrics, and technical textiles. Amendments announced by the Ministry of Textiles, effective from August 1, 2025, significantly reduced the minimum investment requirement from ₹300 crore to ₹150 crore in Part-1 and from ₹100 crore to ₹50 crore in Part-2. Furthermore, the incremental turnover criteria for incentive eligibility was relaxed from 25% to 10% starting from FY 2025–26. These revisions were made to lower entry barriers and encourage wider participation, especially from mid-sized enterprises.