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PLI Scheme: India plans Rs 2.75-lakh-crore incentives. Pharma commits most investments

Pharmaceutical companies committed the highest investment among sectors so far to avail India’s incentives to boost local production.

Companies across 13 sectors have committed or made investments worth about Rs 12,960 crore since April 1, 2021 to avail production-linked incentives, Som Parkash, minister of state for commerce and industry, said in a reply to a query in the Lok Sabha.

The Department of Pharmaceuticals received commitments worth nearly Rs 5,146 crore. And firms across mobile manufacturing and specified electronic components, and IT hardware have made investments worth Rs 3,017 crore under the PLI scheme of the Ministry of Electronics and Information Technology.

The incentives under ‘Atmanirbhar Bharat’ are aimed to boost innovation, research and development, widen product profile of Indian manufacturers, and create jobs in the economy ravaged by the Covid-19 pandemic. The government expects the scheme to aid “significant creation” of production, employment, and economic growth over the next five years and more.

India announced the first set of incentives for three sectors in March last year with a financial outlay of Rs 51,311 crore. It added more sectors to offer total incentives worth Rs 2.75 lakh crore as of December 2021. This includes the government’s Rs 76,000-crore outlay, the highest among sectors, to boost chip manufacturing.

Of the 10 sectors to which PLI was extended to in November 2020, five are in the process of finalising investments.

Companies selected under PLI Scheme
Pharmaceuticals: For the PLI announced in March 2020, the government approved 42 applications with total committed investments of Rs 4,347.3 crore for critical key starting materials and drug intermediaries to makers of APIs, and 13 applications from the makers of medical devices with planned investments of Rs 799 crore.

For the PLI worth Rs 15,000 crore announced in November 2020, India, this year, selected 55 pharmaceutical companies including Sun Pharmaceutical Industries Ltd., Dr. Reddy’s Laboratories Ltd. and Lupin Ltd.

Other companies on the list include Cipla Ltd., Alembic Pharmaceuticals Ltd. and Wockhardt Ltd.

Investment commitments for this set of companies are not available.

In December, the government identified eight manufacturers each for medical devices and bulk drugs under the scheme, according to a Dec. 9 statement by the Ministry of Chemicals and Fertilisers.

Together, these selected 16 applicants are expected to generate investments worth Rs 412 crore.

White Goods: The Department for Promotion of Industry and Internal Trade has selected 42 companies as beneficiaries under the PLI scheme.

These include 26 for air-conditioner manufacturing with a committed investment of Rs 3,898 crore and 16 for LED Lights manufacturing with a committed investment of Rs 716 crore, a DPIIT statement said.

Blue Star Ltd., Daikin Industries Ltd., Havells India Ltd., Voltas Ltd. and Orient Electric Ltd. are among the companies selected.

Telecom and Networking: The government has selected 31 telecom companies, including the local units of Foxconn and Nokia.

The selected firms include 16 small firms or micro, small and medium enterprises, and 15 larger global and domestic players, according to a government statement.

Food Processing: As many as 60 consumer goods firms, including Hindustan Unilever Ltd., ITC Ltd., Nestle India Ltd., Britannia Industries Ltd., Gujarat Cooperative Milk Marketing Federation Ltd. and Dabur India Ltd., have been selected. BloombergQuint

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