On March 10, the $274 billion, Cupertino, California-based Apple Inc. announced it is starting production of the 5G-compatible iPhone 12 in India. It appeared like a routine announcement. After all, Apple has been assembling older generation iPhones in India through contract manufacturers since 2017. It wasn't.
It might have been a small step for Apple but was a giant leap for Indian manufacturing. India's new Production Linked Incentive (PLI) Scheme to reduce import dependence and promote local manufacturing had lured three of Apple's Taiwanese original equipment manufacturers - Foxconnn Hon Hai, Wistron and Pegatron - to pump in millions of dollars to expand Indian facilities. They will move a step up from assembling imported parts here to making or sourcing more components locally. Like Apple, about 70 firms have shown interest in availing the PLI Scheme to set up manufacturing facilities in three key sectors: mobile and electronic components; pharma-APIs (active pharmaceutical ingredients); KSM (key starting materials) and medical devices.
By December 2020, the applicant mobile and electronics makers had invested Rs 1,300 crore, producing goods worth Rs 35,000 crore, creating 22,000 additional jobs. The Centre was so enthused by the response of companies such as Apple to the Large Scale Electronics Manufacturing Scheme that it made mobile PLI the template for extending the scheme to 12 other sectors covering hundreds of diverse products such as air-conditioners, printed circuit boards, solar photovoltaic cells and LED lights. For companies willing to expand or set up plants in the 13 sectors, the scheme offers a massive incentive of Rs 1,99,641 crore ($26.6 billion) over the next five years to substitute imports, augment domestic production, increase exports and build a manufacturing ecosystem that could provide jobs to about 1.9 million people over the five years. If successful, it could put India on the path to be a $5 trillion economy.
The scheme was launched as part of the Covid-19 economic stimulus. It covers auto and auto components, telecom, pharma, medical devices, IT hardware, food products, textiles, steel, air conditioners, Advance Cell Chemistry (ACC) batteries, mobile and electronic components, pharma API and medical devices. A CRISIL research report says the PLI Scheme - directed at sectors that account for 30-35 per cent of India's non-oil import bill - can lead to Rs 2-2.7 lakh crore capital expenditure over two to three years and generate Rs 35-40 lakh crore revenue during its entire period.
Can the enthusiasm of mobile phone makers be repeated in other segments? Can a purely demand-driven scheme (incentive is linked to incremental production and production is linked to demand) make a difference when demand and growth continue to lag in a pandemic-hit world?
But even as companies approach the PLI Scheme with excitement and cautious optimism, there are several unanswered questions. First, will such interest translate into projects on ground? After all, the base year for mobile phone PLI was 2019/20, implying the first incentive tranche was due in 2020/21. But no company has so far approached the government with an incentive disbursement claim yet, the Lok Sabha was informed during the Budget session.
India has over the years offered many incentives to attract manufacturing investment. One was tax holidays in specific locations. Manufacturing in union territories like Puducherry or hill states like Himachal Pradesh did benefit through such schemes. Then there were manufacturing parks where, along with tax benefits, investors could utilise common services and infrastructure. Special Economic Zones offered incentives exclusively for export-oriented units. Many tax schemes got rationalised with the introduction of the Goods and Services Tax.
The big advantage of the PLI Scheme is that it supplements all other sops, is not location-specific, and has nothing to do with tax. Here, the government will pay a certain percentage of the value of additional production companies make, after fulfilling pre-fixed annual, incremental investment and production criteria. Under PLI, companies will earn as direct payments, on average, 5-6 per cent more than what they would otherwise get. While for companies, it is a top-up incentive, for the government, it is assured additional investment, production and job creation for every rupee it spends as incentive. Most importantly, it is WTO compatible.
The Initial Boost
The PLI Scheme for mobiles and electronics parts is built on commitment by the industry to invest more, produce more and claim incentives that on average amount to 5 per cent of incremental revenue a year during the scheme period. Sixteen foreign and Indian companies, including Apple, Samsung and local brand Lava, are in the process of setting up additional mobile phone capacities by investing Rs 11,000 crore over the next five years. While foreign players have cumulatively proposed production of Rs 9 lakh crore worth of mobile phones (unit price of Rs 15,000 or more) utilising enhanced capacities, Indian firms together will be manufacturing another Rs 1.24 lakh crore worth of feature and smart phones during this period. Hypothetically, at 18 per cent GST (and assuming that more than half the production is exported), this could mean at least Rs 36,000 crore tax revenue for the Central government. That's a good return for the Rs 40,951 crore worth of incentives over the next five years.
The gains go beyond revenues. The government believes electronics alone can generate 2,00,000 direct and 6,00,000 indirect jobs in the next five years. It is expected to increase domestic value addition in mobile phones from 15-20 per cent to 35-40 per cent. The excitement is palpable. "Many people have started talking to us. I have invested more than Rs 100 crore in plant and machinery. Given an opportunity, I can even produce Apple devices," says Rajesh Agrawal, Director, Bhagwati Private Ltd, which makes mobile phones for Micromax and others. The PLI Scheme for mobile phones has got international attention too.
Why China is Worried
India's quest to be a factory to the world has rattled China as it could lose manufacturing opportunities. Industry players say China, the world's largest supplier of mobile phones and parts, is trying to dissuade companies from shifting to India. "The Chinese government has reached out to big contract manufacturers to demotivate them from applying for the PLI Scheme," says an industry source.
The government expects companies to export significantly. "Of the estimated production of Rs 10.5 lakh crore over the next five years, around 60 per cent (Rs 6.5 lakh crore) will be exports," says Ravi Shankar Prasad, Union Minister for Electronics and Information Technology.
But Why PLI?
PLI was conceived to set off the higher cost of manufacturing in India as compared to China. It seeks to cushion industry from higher costs due to steeper tax rates, finance costs, power tariffs and land prices. A parliamentary panel recently said logistics costs alone account for 13 per cent of India's GDP, higher than developed countries' figure of less than 10 per cent. The Covid-19 induced hardships made the scheme even more useful for industry.
While the PLI Scheme does not specifically incentivise exports, it also has the potential to help manufacturing gain scale and become competitive, apart from promoting exports and narrowing the trade deficit. It is in line with a demand made by the Confederation of Indian Industry four years ago.
The scheme can also help India reduce dependence on imports for key raw materials. According to India Exim Bank Research, nearly 79 per cent imports in 2019 were of intermediate goods. "Clearly, India's manufacturing sector has significant dependence on imported intermediates, which can be reduced by greater localisation of manufacturing activities through the PLI Scheme," says Prahalathan Iyer, Chief General Manager, Export-Import Bank of India. The Exim Bank analysis reveals that India's trade deficit on account of just five sectors in the PLI list - ACC battery, electronics, medical devices, solar PV and white goods - was $40.9 billion in 2019/20, accounting for more than a quarter of merchandise trade deficit and 56.8 per cent non-oil merchandise trade deficit. The scheme covers almost all top 10 import items except petroleum products, gems and jewellery and fertilisers. It has the potential to increase India's share in the global supply chain, reduce import dependence (especially on China) and create manufacturing champions - all in the next five-seven years. The high expectations were spelled out by Prime Minister Narendra Modi when he said the "scheme would result in increasing production by about $520 billion in the next five years." But what is PLI all about?
The Scheme
AtmaNirbhar Bharat 3.0, or the third set of Covid-19 economic stimulus announced by Finance Minister Nirmala Sitharaman on November 12, 2020, spelt out the PLI Scheme in its current scope and size. The government added 10 sectors with a commitment to set aside Rs 1.46 lakh crore over five years. This was in addition to the three sectors - electronics (Rs 40,951 crore), pharmaceuticals (Rs 6,940 crore) and medical devices (Rs 3,420) crore - totalling Rs 51,311 crore that were already under the scheme (the Cabinet had approved PLI for Large Scale Electronics Manufacturing on March 21, 2020, four days before the first lockdown. Pharmaceuticals and medical devices were added on July 21).
At present, approvals for eligible companies have been given for these three sectors, though the list is not complete in case of pharmaceutical and medical device segments. Of the remaining 10 sectors, Cabinet approvals for six - pharmaceutical products like complex generics, biopharmaceuticals, etc (Rs 15,000 crore incentive), IT hardware products like laptops, tablets, personal computers and servers (Rs 5,000 crore), telecom and networking products (Rs 12,195 crore), food processing (Rs 10,900 crore), white goods like air-conditioners and LEDs (Rs 6,238 crore) and solar PV modules (Rs 4,500 crore) - are also in place.
Cabinet approvals, followed by notification with operational guidelines, can happen any day for automobiles & auto components (Rs 57,042 crore), ACC battery (Rs 18,100 crore), textile products (Rs 10,683 crore) and specialty steel (Rs 6,322 crore). Since it is time-bound, companies will get a fixed time to apply. Government approval will come within the stipulated period to help eligible firms meet thresholds for availing the incentive. The incentive will be paid to the benefeciary through direct transfer to bank accounts.
Electronics Industry: On Track
The PLI Scheme for electronics, the template for all other schemes that followed, was borne out of a desire to operationalise the National Policy on Electronics 2019 that talked about positioning India as the world's Electronics Factory. About 50 industry leaders representing leading global and Indian electronic companies such as Apple, Samsung, Lava, Xiaomi, Bosch, Foxconn, Panasonic and Wistron met Ravi Shankar Prasad at Vigyan Bhawan, New Delhi, on September 16, 2019. Prasad's ministry came out with a scheme for financial incentive to boost domestic manufacturing and attract investments in the electronics value chain, including electronic components and semiconductor packaging. It extended an incentive of 4-6 per cent on incremental revenue (over 2019/20) of goods manufactured in India and covered under target segments for a period of five years from the base year. The eligibility conditions included minimum incremental investments and revenue. While incremental revenue target for domestic mobile phone companies begins at Rs 500 crore in year one to Rs 5,000 crore in year five; for foreign players, it is Rs 4,000 crore in year one to Rs 25,000 crore in year five. Domestic firms have to commit an incremental investment of Rs 200 crore over four years. For foreign players, this is Rs 1,000 crore. Apart from mobile phones, there were about a dozen segments such as SMT (surface mount technology) components, discrete semiconductor devices, Printed Circuit Boards, etc. While AT&S, Ascent Circuits, Visicon, Walsin, Sahasra and Neolync were selected for incentives under the Specified Electronic Components Segment, Samsung, Rising Star, Foxconn Hon Hai, Wistron, Pegatron, Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics got approval for making mobile phones. "The game has started now. The government of India has understood what to do," says Bhagwatis Agrawal.
Pharma: In Sweet Spot
The response to the pharmaceutical schemes - there are two packages, one is already in force, while the other is in the notification stage - has been encouraging. The first scheme - PLI for Critical Key Starting Materials/Drug Intermediaries and Active Pharmaceutical Ingredient - targets 41 highly or almost entirely import dependent products from four target segments. The second one is meant to promote innovation for development of complex and high-tech products, including those used in emerging therapies, apart from in-vitro diagnostic devices and important drugs not manufactured in India.
"We are very happy with the government decision, it is timely. We have 68 per cent import dependence on China for these products. The PLI-I Scheme will bring down this dependency by 25 per cent and PLI-II by another 25 per cent. Only nominal dependence on China will remain," says B.R. Sikri, Chairman, Federation of Pharma Entrepreneurs.
The number of applicants shows the scheme is making business sense. Of the 215 applications for 36 products in four segments, 47, with total committed investment of Rs 5,366.35 crore, have been approved. Hyderabad-based Aurobindo Pharma has bagged most approvals in Segment I, which provides incentives to set up greenfield facilities for fermentation-based key starting materials and drug intermediates for production of medicines like penicillin G and Erythromycin Thiocynate. Eleven companies, including Macleods Pharmaceutical for Rifampicin and Natural Biogenex for commonly prescribed Betamethasone and Dexamethasone, will make essential raw materials for key medicines. The incentive for this six-year PLI varies from 10 per cent to 20 per cent depending on the manufacturing process. "We looked at our captive consumption, and the products that were on the PLI list. We realised that if we select some of those products, we have some assured business. Today majority of these products are imported, that too from China.," says Madan Mohan Reddy, Director, Aurobindo Pharma. The company is in the midst of finalising the land for the new plant.
Medical Devices: Adding Muscle
The third PLI Scheme where companies have been chosen (not all applications have been examined and some more approvals will happen soon) and investments are already happening is for medical devices. The incentive size is small compared to others, but the impact could be huge as self-reliance in selected products - CT Scan, MRI, Ultrasonography, X-Ray, Cath Lab, Positron Emission Tomography Systems, Heart Valves, Stents, PTCA Balloon Dilatation Catheter and heart occluders - is critical for India.
Siemens Healthcare, Allengers Medical Systems, Wipro GE Healthcare, Nipro India Corporation and Sahajanand Medical Technologies (SMTPL) have received approval. These plants will entail a total investment of Rs 729.63 crore and employ about 2,300 people. Commercial production is projected to commence from April 1, 2022. Disbursal of PLI over the five-year period will be up to Rs 121 crore per applicant per target segment.
"The industry's views were accepted by the government, especially on reducing the threshold investment limit and criteria," say Bhargav Kotadia, Managing Director, SMTPL. His company has committed investment of Rs 166.89 crore to manufacture products like heart valves, stents, PTCA balloon dilatation catheters and heart occluders. This is one of the largest in the current set of approvals.
The company has made considerable progress in constructing a facility in the medical devices park in Telangana. "This is envisaged as Asia's largest stent manufacturing and R&D facility. It will manufacture over 1.2 million stents and two million catheters a year at full capacity. We will also house and develop advanced medical products in interventional cardiovascular, endovascular and other niche devices in the CVD (cardiovascular diseases) domain," he says.
Wipro GE Healthcare Private Ltd plans to invest about Rs 100 crore over the next three-four years for manufacturing medical devices. "As dependency shifts to our local manufacturing hub over the next few years, the need for importing these products will naturally decrease. It certainly (PLI participation) is a combination of import substitution and higher growth rate propelled by lower cost leading to additional revenues," says Shravan Subramanyam, President & CEO, GE Healthcare, India & South Asia.
Next In Line
The next set of Cabinet approvals came for three schemes in February 2021. These are more or less connected to the three operational ones. While the two schemes targeting IT hardware and telecom and networking products can be seen as an attempt to complete what started with mobile phones and other electronics products last year, the pharmaceutical scheme aims to cover a much bigger universe of medicines to make India self-reliant in essential ingredients used in life-saving drugs.
"Consumption of IT hardware is perhaps the largest after mobile phones. PLI for this segment can do what it did to mobile phones," says Satya Gupta, Chairperson, India Electronics and Semiconductor Association and founder and CEO, Seedeyas Innovations. The major thrust of the scheme is on laptops and tablets whose demand is largely met through imports (valued at $4.21 billion and $0.41 billion, respectively, in FY20). The scheme offers an incentive of 4 per cent to 2 per cent to 1 per cent on net incremental revenue (over base year 2019/20) to eligible companies for a period of four years. The incentive outlay is Rs 7,350 crore. It is expected to benefit five global and 10 domestic players and generate over 1,80,000 jobs in four years. The domestic value addition in IT hardware is expected to rise to 20-25 per cent by 2025. "Today, only 15-20 per cent of domestic consumption is made in India. Servers are 100 per cent imported, laptops are 90-95 per cent imported, and only 30 per cent desktops are made here. Four companies - HP, Lenovo, Dell and Acer - manufacture in India currently," says George Paul, CEO, Manufacturers Association of Information Technology. According to him, PLI cannot herald changes overnight. "When China started out, it developed an integrated strategy that stitched together a series of steps needed towards maximising value addition in China. India is doing the same thing. It is not a one-year strategy. We shouldn't lose sight of our goal," he adds.
Acer, the Taiwanese hardware and electronics major, feels the PLI Scheme will generate jobs, lead to better pricing and develop adjacent ecosystems. The company, which makes tablets and laptops in India, says it can boost manufacturing in the IT hardware segment. "We do intend to apply for PLI via our ecosystem vendors," says Sudhir Goel, Chief Business Officer, Acer India.
In telecom equipment, the focus products are transmission equipment, 4G/5G Next Generation Radio Access Network and Wireless Equipment, Access & Customer Premises Equipment, Internet of Things devices, Access Devices and other wireless and enterprise equipment like switches and routers. The aim is to reduce the huge import of telecom equipment worth more than Rs 50,000 crore. The incentive to approved companies is Rs 12,195 crore over five years.
Ericsson, the first telecom vendor to start making telecom equipment in India, way back in 1994, expects PLI to provide a fillip to component manufacturing. Nitin Bansal, MD, Ericsson India, says the company is waiting for the final guidelines to take a call on participation. "The process of claiming incentives and timelines for pay-out of incentives are important considerations," he says.
Meanwhile, the second PLI Scheme for pharmaceuticals has come as part of an umbrella programme to make the Indian pharmaceutical industry self-reliant. The incentives are structured under three categories. The first covers biopharmaceuticals, complex generic drugs, patented drugs or drugs nearing patent expiry, cell-based or gene therapy drugs, orphan drugs, special empty capsules, complex excipients, phyto-pharmaceuticals, etc. The second covers some active pharmaceutical ingredients, key starting materials and drug intermediates that were not there in last year's pharma PLI. The third covers repurposed drugs, auto immune drugs, and anti-cancer, anti-diabetic, anti-infective, cardiovascular, psychotropic and anti-retroviral drugs. The scheme period is from 2020/21 to 2028/29.
On March 31, the government notified the fourth scheme, PLI for the food processing industry, for implementation during 2021/22 to 2026/27, with an outlay of Rs 10,900 crore. The scheme will encourage investment in four food segments - Ready to Cook/Ready to Eat, processed fruits and vegetables, marine products and mozzarella cheese. The government says the aim is to support creation of global food manufacturing champions, support Indian value-added food brands in international markets, increase off-farm jobs and ensure remunerative prices to farmers. Amul, ITC, Nestle, Britannia and Keventer Agro are among the major players to have shown interest in the scheme.
The most recent ones to get Cabinet nod are PLI on white goods, primarily air-conditioners, and high efficiency solar PV modules to create additional 10,000 MW solar PV manufacturing capacity. Both were notified on April 7, 2021 "The first objective is to manufacture, not just assemble, in India. At present, many components come from elsewhere. Last year, the Indian AC market was around 7.5 million units. Of this, 2.5 million were imported, which has come down significantly due to ban on import of ACs with refrigerants. Further, value addition is very low, just about 25 per cent," says Manish Sharma, President & CEO, Panasonic India, and Chairperson, Ficci Electronics & White Goods Manufacturing Committee. Sharma expects the market to touch nine million this year of which 8-8.5 million will be manufactured locally. At present, there is 25 per cent local value addition. The PLI Scheme can take this to 75 per cent in the next three years, says Sharma.
The government wants to encourage local solar PV panel manufacturing to reduce the possibility of hacking of the value chain. Among the estimated benefits are direct investment of Rs 17,200 crore in setting up solar PV manufacturing projects, direct employment to about 30,000 and indirect employment to about 1,20,000 people and import substitution of Rs 17,500 crore worth of products every year.
Awaiting Approval
The companies eyeing opportunities arising out of the last four categories - automobiles, ACC batteries, textiles and speciality steel - are waiting for details of the scheme. In these cases, Cabinet approval should come first. Operational guidelines will follow.
The biggest scheme is for the automotive industry. There is a Rs 57,042 crore incentive for automobile and auto component makers. Another Rs 18,100 crore scheme for promoting ACC battery is primarily to help the e-mobility push, though batteries are also an integral part of consumer electronics and renewable energy industries.
The thrust on the automotive industry is not surprising. The $120 billion industry comprises hundreds of big, medium and small companies that together employ 37 million people and account for nearly half of the country's manufacturing GDP. Some companies like Hero MotoCorp, Bajaj Auto, Tata Motors, Mahindra, TVS, Royal Enfield, Bharat Forge and Motherson Sumi are world-class. So are local subsidiaries of multinational firms like Hyundai, Honda, Toyota or Bosch. Yet, there is a feeling that the industry has stagnated over the last decade due to high costs and slowing economy and needs a push. The PLI Scheme aims to do just that.
"What is needed is enabling our industry to become globally competitive. The reasons aren't new - our cost is very high, be it logistics or power or raw material. One way to overcome that is scale. I think that is where the government is looking at incentivising the industry so that we can attain scale at a global level," says R.C. Bhargava, Chairman, Maruti Suzuki India.
The Rs 57,042 crore outlay is spread over fiscals 2023 to 2027. It will cover four smaller schemes for specific segments. There are a number of riders. The maximum incentive a company can avail is Rs 8,556 crore, mostly through cash-back of between 2 per cent and 12 per cent of incremental sales and export revenue. On the anvil are four sub-schemes - global sourcing scheme of Rs 7,210 crore, vehicle champion scheme of Rs 18,075 crore, component champion scheme of Rs 8,129 crore and the Rs 23,628 crore logistics cost incentive scheme. A company can avail only three of these schemes. There will be separate norms for new companies entering the country.
The eligibility criteria for these schemes will also be different. Only companies with a turnover of Rs 1,000 crore (Rs 100 crore for component makers) from overseas operations, Rs 10,000 crore overall revenue (Rs 500 crore for component firms) and Rs 3000 crore global investment in fixed assets (Rs 150 crore for component industry) will qualify for the global champion scheme.
The incentives will help, the these caveats disqualify most smaller companies. "The PLI Scheme is expected to help both auto and auto components industry overcome challenges of logistics and energy costs, among others," says Vinnie Mehta, Executive Director, Automotive Component Manufacturers Association.
The PLI scheme in textiles - man-made fibre (MMF) and technical textiles - is an attempt to rescue one of the most labour intensive sectors from the Covid-19 related global demand slump. "MMF is a $200 billion opportunity globally. If we create a supply chain with design, product development, fabric development and, of course, garmenting, we can target 10 per cent of this $200 billion," says Sanjay Shukla, a senior executive of Gurgaon-based apparel sourcing solutions provider Triburg Apparel. India is the sixth-largest exporter of textiles and apparels in the world but has only 5 per cent global market share. The incentive under the textile PLI Scheme is Rs 10,683 crore. "The government has announced a PLI Scheme for the MMF segment and creation of seven mega textile parks. These will increase production and export of MMF garments from India," says A. Sakthivel, Chairman, Apparel Export Promotion Council.
Meanwhile, the PLI Scheme on speciality steel covers coated steel, high strength steel, steel rails, etc. The stakeholders are very clear about its purpose. Dilip Oommen, CEO, ArcelorMittal and President of the Indian Steel Association, says as downstream manufacturing and construction techniques become more advanced, they will increasingly require value added and higher-end steels. "The specialty steel PLI Scheme will create domestic capacities for such products, meeting requirements both domestically and internationally," he says, adding that "the investment decisions by steel companies will depend on details of the scheme and how it dovetails with individual business plans going forward". Seshagiri Rao, Joint MD & Group CFO of JSW Steel, says he will prefer to wait for the details of the scheme, though he says his company is keen to participate. With high speed rail and metro rail projects picking up in a big way, domestic demand for speciality steel items shortlisted under the scheme could increase, he says.
Concerns & Suggestions
Yet, concerns remain. The CRISIL Report which analysed the PLI Scheme said the scheme is not evenly attractive across all 13 sectors. While it is lucrative for sectors like mobile phones, electronics, telecom and IT hardware, it may not be so for others such as specialty steel and textiles. CRISIL points out that the incentive-to-capex ratio is particularly attractive at above 3.5 times in sectors where Indias local manufacturing base is relatively narrow and dependence on imports high. However, the incentive-to-capex ratio for most sectors - except white goods and pharmaceutical ingredients and bulk drugs - is in the 0.50-1 range. It is worse in specialty steel and textiles. The potential of the scheme to add to industrys FY20 domestic revenue base is also low (below 25 per cent) in some cases, it says, adding that relatively capex-intensive segments with focus on domestic manufacturing and import localisation will be cautious in evaluation of opportunities. It can be seen that the schemes that got finalised quickly are the ones where the incentive and opportunities make sense.
Acer Indias Sudhir Goel says while PLI offers a great boost to Indian manufacturing, the existing handicaps are much larger than the incentive. "Consistent supply of raw materials and components in the IT category will be the main challenge. We hope it streamlines once hardware manufacturers scale up manufacturing."
While ease of doing business reforms and dovetailing of other schemes to support manufacturing can address some of these problems, the key to success - generation of sufficient demand to meet annual growth targets to avail the incentive - is not in the governments or the manufacturers hands. This is one criticism by the main opposition party, the Indian National Congress. Its spokesperson Gourav Vallabh says, "After Covid-19, when demand is perhaps at an all-time low, who will these manufacturers produce for and why would they empty their pockets with investments immediately? PLI will yield zero benefits in the short and medium term. Second, it ignores key ecosystem details. What about R&D and infrastructure investment by the Centre to beat competition from low-cost countries?" India should also be wary of international pressure against offering additional support (like increasing import duty) to make local manufacturing more competitive, say experts.
The key is timely implementation and release of incentives, additional interventions like Customs duty changes (which is work in progress) to discourage imports and help domestic manufacturing, and integrating the scheme with overall infrastructure support through projects like bulk drug parks (for pharma), medical device parks and integrated textile parks. Union Budget 2021/22 touched upon all these and more. The vaccine diplomacy post Covid-19 crisis has turned the global mood in favour of India made products. Its time for action.
With inputs from Sumant Banerji, Rukmini Rao and Nevin John
@joecmathew; nidhisingal