Page 28 - Banking Finance June 2023

ARTICLE

Notably, the exports of mobile phones have also reached is possible when domestic industries are given more and due
a remarkable milestone of 11 billion USD (about Rs 90 importance. Another reason is that India is primarily a
thousand crores) this year. labour intensive workforce owing to the population, and
that the government could focus on capital influx for growth.
3. India is attracting the attention of the global electronics
manufacturing ecosystem, positioning itself as a
But the capital intensive growth can generate returns only
prominent player in the field. The country is rapidly
after a long time, a duration that foreign funding can afford.
emerging as a major hub for electronics manufacturing,
So instead, the government shifting its focus to boost short
capitalizing on the opportunities presented by the
term, under a year result driven industries, can potentially
industry.
balance the trade into and out of the country. The local
4. The PLI scheme can also bring back old designs and production will lead to lower costing products for Indian
product customs that can contribute heavily to the
consumers. The global electronics manufacturing ecosystem
diversity, while also empowering forgotten artistry
is coming to India, and it is emerging as a major electronics
buried due to colonialism.
manufacturing country.
5. The framework of the PLI scheme is to reward increased
production. Phases of PLI Scheme
6. Due to the niche and specificity of PLI linked sectors, First Phase
that mostly involve careful and attentive focus on man The first phase of the initial PLI scheme covered three
force and creating, PLI can enhance building systems sectors, namely, mobile phones, pharmaceuticals, and
to adjust to climate change and even essentially reverse medical devices. Later, in November 2020, the government
it in the many years to come. announced inclusion of ten additional sectors (totaling to 13
sectors) mentioned below:
7. The telecom and mobile phone PLIshave brought in
1. Advanced Chemistry Cell (ACC) Battery: The scheme
investments of more than Rs. 3,600 crores and created
aims to encourage domestic manufacturing of ACC
lot of jobs over the past two years.
batteries, which are used in electric vehicles, grid
storage, and other applications.
Objective
2. Electronic/Technology Products: The scheme aims to
The objective of the PLI 2.0 scheme is to make India a global
promote domestic manufacturing of electronic and
manufacturing hub for identified sectors.The scheme aims
technology products, such as laptops, tablets, servers,
to increase production, create jobs, and reduce imports. The
and routers.
PLI scheme is essential in the country for many reasons. The
prime necessity, is to neutralize the amount of imports and 3. Automobiles and Auto Components: The scheme aims
exports in the country in a non-discriminatory manner. This to promote domestic manufacturing of automobiles and
auto components, such as electronic power steering
systems, sensors, and electric vehicle components.
4. Pharmaceuticals: The scheme aims to promote
domestic manufacturing of key starting materials
(KSMs), drug intermediates, and active pharmaceutical
ingredients (APIs).
5. Telecom and Networking Products: The scheme aims
to promote domestic manufacturing of telecom and
networking products, such as optical fibers, 4G/5G
equipment, and routers.

6. Textiles Products: The scheme aims to promote
domestic manufacturing of man-made fibers and
technical textiles.
7. Food Products: The scheme aims to promote domestic

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