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Food-processing play important role in PLI schemes in 2023

The food processing sector, an important part of the agri-economy of the country is reported to have played an important role for the Production Linked Incentive (PLI) Schemes witnessing over Rs. 1.03 lakh crore of investment till November 2023, which has led to production/ sales of Rs. 8.61 lakh crore and employment generation (direct & indirect) of over 6.78 lakhs. The PLI Schemes witnessed exports surpassing Rs. 3.20 lakh crore, with significant contributions from sectors such as Food Processing, Large-Scale Electronics Manufacturing, Pharmaceuticals, and Telecom & Networking products.
The government approved as many as 746 applications in 14 Sectors, with an expected investment of over Rs. 3 lakh crore. 176 MSMEs are among the PLI beneficiaries in sectors such as Bulk Drugs, Medical Devices, Pharma, Telecom, White Goods, Food Processing, and Textiles & Drones. Several MSMEs are serving as investment partners/ contract manufacturers for large Corporates, presently.
An incentive amount of around Rs. 4,415 crore disbursed under PLI Schemes for 8 Sectors viz. Food Processing, Large-Scale Electronics Manufacturing (LSEM), IT Hardware, Bulk Drugs, Medical Devices, Pharmaceuticals, Telecom & Networking Products, and Drones & Drone Components.
Manufacturing of various electronic components like battery, chargers, PCBA, PCB, camera modules, passive components and certain mechanics have been localized in the country. Green shoots in the component ecosystem wherein large companies such as TATAs have entered into component manufacturing. PLI beneficiaries account for 20 percent of the market share only, however, have contributed to 82 percent mobile phones exports during FY 2022-23. Production of mobile phones increased by more than 125 percent and export of Mobile Phones increased 4 times since FY 2020-21. Foreign Direct Investment (FDI) increased by 254 percent since the inception of the PLI scheme for LSEM.
There had been a significant reduction in imports of raw materials in the Pharma sector due to the PLI Scheme. Unique intermediate materials and bulk drugs are being manufactured in India including Penicillin-G. Production of 39 Medical Devices have commenced such as CT-Scan, Linear Accelerator (LINAC), Rotational Cobalt Machine, C-Arm, MRI, Cath Lab, Ultrasonography, Dialysis Machine, Heart Valves, Stents, etc.
Import substitution of 60 percent and sales of Telecom & Networking Products by PLI beneficiary companies in FY 2023-24 increased by 370 percent vis-a-vis Base Year (FY 2019-20). Significant impact on investment in the Drone industry with a CAGR of 90.74 percent.
Under the PLI Scheme for Food Processing, sourcing of raw materials from India has seen significant increase impacting positively income of Indian farmers and MSMEs. Sales of Organic Products increased and made the Indian brands denting the international market rapidly through Branding & Marketing abroad. The Scheme has also led to increased Millet procurement, from 668 mt (FY 20-21) to 3,703 mt (FY 22-23).
Keeping in view India’s vision of becoming ‘Atmanirbhar’, PLI Schemes for 14 key sectors with an incentive outlay of Rs. 1.97 lakh crore (over US$26 billion), are under implementation to enhance India’s Manufacturing capabilities and Exports.
The PLI Scheme across these key specific sectors has started showing results in making Indian manufacturers globally competitive, attracting investment in the areas of core competency and cutting-edge technology; ensuring efficiencies; creating economies of scale; enhancing exports and making India an integral part of the global value chain.
The PLI Schemes have transformed India’s exports basket from traditional commodities to high value-added products such as processed food products, electronics & telecommunication goods, etc.