Sunrise sectors battery, solar modules manufacturing lag in PLI application clearance; specialty steel & food products lead

Indian Express

2 days ago

The government has cleared 806 applications under the Production Linked Incentive (PLI) schemes that began in 2021 and incentive amounts to the tune of Rs 21,689 crore have been disbursed, resulting in investments worth Rs 1.90 lakh crore in the 14 PLI sectors, the Ministry of Commerce and Industry said Tuesday.
Data shared by the Ministry in a reply to a parliamentary question showed that applications from traditionally strong sectors such as food products and specialty steel saw the highest number of clearances, while sunrise sectors that require larger investments, such as Advanced Chemistry Cell (ACC) batteries and high-efficiency solar PV modules, saw the least number of application clearances.
Explaining the low disbursement figures, a government official told The Indian Express that the disbursements are low as several companies have not been able to meet the targets. 'The private sector has flagged that there is a lack of sufficient demand, which is the reason why they have not met targets,' the official said.
'The production, however, is happening, but they are not getting incentives as they have not reached the benchmark. The government is satisfied with investment and production figures but disbursements continue to be very low. But in one way, the objective of the government — to increase capacity and production — is being achieved,' the official said.
The official pointed out that 'pricing pressure' in China is one of the key reasons why approvals in the ACC battery and high-efficiency solar PV modules segments are low. China has emerged as a leader in the EV sector and also controls much of the critical minerals crucial for the automobile industry.
While the government has cleared only four battery manufacturing applications, the comparable number in the solar module sector stands at 14. Clearances in other sunrise sectors such as 'drones and drone components' also stood at 23, the Ministry's reply to a parliamentary question showed.
On the contrary, sectors where India has been stronger have seen higher clearances. The government has cleared as many as 182 applications in the food products category, 109 in the specialty steel sector and 95 in the automobiles & auto components sector.
Electronics manufacturing and technology product manufacturing, meanwhile, continued their strong performance in terms of production. Over 50 applications have received clearance, the data showed. The Ministry said that in the electronics sector, the production of mobiles in value terms has increased by around 146 per cent from Rs 2,13,773 crore in 2020-21 to Rs 5,25,000 crore in 2024-25.
'During the same period, exports of mobile phones in value terms have increased by around 775 per cent from Rs 22,870 crore in 2020-21 to Rs 2,00,000 crore in 2024-25,' the Ministry said.
The Ministry said that PLI in the pharmaceuticals sector has also begun boosting production, resulting in cumulative sales of Rs 2.66 lakh crore, out of which exports worth Rs 1.70 lakh crore have been achieved in the first three years of the scheme.
'The scheme has contributed to India becoming a net exporter of bulk drugs (Rs 2,280 crore) from a net importer (-Rs 1,930 crore), as was the case in FY 2021-22. It has also resulted in a significant reduction in the gap between the domestic manufacturing capacity and demand for critical drugs,' the Ministry said.
Under the PLI Scheme for medical devices, 21 projects have started manufacturing 54 unique medical devices, which include high-end devices such as Linear Accelerator (LINAC), MRI, CT-Scan, Heart Valve, Stent, Dialyser Machine, C-Arm, Cath Lab, Mammograph, MRI Coils, etc., the Ministry said.
The government in 2021 had announced PLI schemes for 14 sectors with an outlay of Rs 1.97 lakh crore.