Production Linked Incentive (PLI) Scheme launched in April 2020 covers 14 sectors with ₹1.97 lakh crore outlay over five years. Aims to boost domestic manufacturing, reduce import dependence, and create employment. Key beneficiaries include mobile manufacturing, pharmaceuticals, automobiles, textiles, and solar PV modules. Over 750 companies approved across sectors. Mobile manufacturing shows strongest performance with production exceeding targets. Textile and pharmaceutical sectors face implementation delays. Scheme targets $520 billion additional production and 1 crore jobs by 2025-26.

PLI represents India's strategic shift toward manufacturing-led growth, addressing the structural challenge of low manufacturing contribution (16-17% of GDP versus China's 28%). The scheme incentivizes incremental production over base year, creating competitive advantages for domestic manufacturers while attracting global players to establish India operations. Success varies significantly across sectors - electronics and pharmaceuticals leverage existing capabilities, while textiles and automobiles face infrastructure and skill constraints. The scheme's design linking incentives to incremental sales rather than investment ensures performance-based disbursement. However, implementation challenges include complex approval processes, delayed fund releases, and inadequate supporting infrastructure. Global supply chain disruptions post-COVID have both helped (reshoring opportunities) and hindered (raw material shortages) progress. The scheme's success will determine India's ability to achieve $5 trillion economy target and reduce current account deficit through import substitution and export promotion.