India’s Production Linked Incentive (PLI) Scheme for the Manufacturing Sector

What is the Production Linked Incentive (PLI) scheme and what are its target segments?

PLI Scheme was announced with the objective to make domestic manufacturing globally competitive, attract investments, enhance exports, and make India an integral part of the global supply chain. The scheme provides incentives on incremental sales from products manufactured in India over the base year.

There are 13 target segments under the scheme, namely, Mobile Manufacturing and Specified Electronic Components, Manufacturing of Medical Devices, Critical Key Starting materials/Drug Intermediaries and Active Pharmaceutical Ingredients, White Goods (ACs & LED), Telecom & Networking Products, IT Hardware, Pharmaceuticals drugs, Solar PV Modules, Food Processing, Advanced Chemistry Cell (ACC) Battery, Textiles, Specialty Steel, Electronics and Technology Products.

Who is an applicant under the PLI scheme?

An applicant under the scheme is a company registered in India, proposing to manufacture goods covered under the target segments.

The applicant can operate new or existing manufacturing facility to manufacture goods and manufacturing can be carried out at one or more locations in India.

What are the eligibility criteria under the scheme?

• Eligibility shall be subject to thresholds of incremental investment and incremental sales of manufactured goods covered under target segments over the base year.
• To meet the threshold criteria of incremental investment for any year, the cumulative value of investment done till such year (including the year under consideration) over the base year shall be considered.
• To meet the threshold criteria of incremental sales, the total sales of manufactured goods covered under target segments for such year over the base year, irrespective of invoice value shall be considered.

What are the documents that need to be submitted along with the application form?

Some of the important documents that need to be submitted along with the application form:

• Certified copy of the memorandum and articles of association or equivalent registration document
• Certificate of incorporation of Company
• Letter of Authorization by Board of Directors or Managing Director or equivalent
• Shareholding Pattern (Latest submitted with Registrars of Companies and certified by Company Secretary)
• Self-certified copies of PAN, GST Certificate for the applicant
• Self-certified copies of brief profile of Chairman, CEO and CXOs
• Credit History Certificate
• Qualification Criteria Certificate for consolidated manufacturing revenue
• Self-certified certified copies of Annual Reports including Annual Financial Reports along with schedules for 3 years
• Proof of Application Fee payment

If a company has applied under the PLI scheme, can it also apply for incentives under other schemes, for instance, the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)?

Yes, a company can apply for incentive under both PLI and SPECS. Eligibility under PLI scheme shall not affect eligibility under any other scheme and vice-versa.

However, eligibility criteria will have to be fulfilled in accordance with the respective schemes and guidelines. Further, incentive disbursal under PLI and SPECS will also be independent of each other.