India’s manufacturing industry is on the cusp in 2025, driven by the government’s ambitious Production Linked Incentive (PLI) schemes.Introduced in 2020 as a push to encourage domestic production and turn India into a global manufacturing hub, these schemes provide fiscal incentives to firms that raise production and sales.With an over INR 2 lakh crore budget and spanning 14 crucial sectors, PLI schemes aim to generate employment, cut imports, and boost exports. But are they really a game-changer for Indian manufacturers? Let’s see how they are impacting, challenging, and how businesses facilitate this revolution.The PLI initiatives offer cash rewards—4-6% of value-added sales—to Indian manufacturers producing in India. Rolled out under the Atmanirbhar Bharat (Self-Reliant India) programme, they seek to make Indian industry competitive, enhance foreign investment, and place India in global value chains.The 14 industry segments covered are electronics, automobiles, pharmaceuticals, textiles, solar modules, and telecom equipment, with an overall outlay of INR 1.97 lakh crore (USD 28 billion) through 2025-26.The Union Budget in 2025 doubled PLI funding to INR 19,482.58 crore for FY 2025-26, an increase of 108% compared to INR 9,360.36 crore in FY 2024-25. Automobiles, textiles, and battery storage were the major sectors with their allocations rising, while automotive allocations increased from INR 346.87 crore to INR 2,819 crore. The PLI schemes have been positive in certain sectors:Electronics Boom: The smartphone manufacturing industry is a highlight achievement. Smartphone exports jumped by 139% by 2024, with investments worth INR 4,784 crore and companies like Apple relocating 18% of iPhone production to India by FY 2025. It has generated more than 6.78 lakh jobs and generated sales of INR 8.61 lakh crore.Automotive developments: PLI-Auto scheme with an outlay of INR 25,938 crore encourages electric vehicles (EVs) and hydrogen fuel cell cars, with a target to generate 750,000 direct employment opportunities. It encourages zero-emission vehicles, lowering India’s oil import bill and pollution.Solar Power Surge: PLI program for solar PV modules with INR 24,000 crore has increased domestic capacity to 48 GW by 2023. In 2025, it’s supporting India to achieve 10% of world wind energy demand. Such achievements have brought in global giants like Foxconn and Tata, with FDI in manufacturing increasing 76% in 2021-22 over the last year. Challenges: Are PLI Schemes Falling Short?Though there are victories, the PLI schemes run into huge obstacles, casting skepticism on their game-changer status:Missed Targets: By October 2024, PLI schemes could only meet 37% of its production target (USD 151.93 billion out of USD 410 billion), with only 8% of funds budgeted (USD 1.73 billion) released. Bureaucratic delays and sluggish subsidy disbursements have upset companies.Limited Domestic Value Addition: Most work done in electronics is assembly, not complete manufacture. The imports of mobile phone parts such as batteries and displays increased between FY21 and FY23, indicating foreign supply chain dependency. World Trade Organization (WTO) regulations restrict the obligation of subsidies to domestic value addition, making self-reliance challenging.Sectoral Struggles: Solar, steel, and textile sectors are behind. To illustrate, eight of 12 solar PLI players, such as Reliance and Adani, won’t reach 2027 goals because of delays in procuring equipment.No Expansion Planned: In 2025, the government chose not to expand PLI to more than 14 sectors or to delay deadlines despite appeals from companies. This may cap long-term effect, with commentators saying India squandered a golden opportunity to catch up with China’s dominance in manufacturing.Posts on X reflect mixed sentiments. Some praise the PLI for boosting EVs and electronics, while others call it a “jumla” (empty promise), noting that manufacturing’s GDP share remains stuck at 14% instead of reaching the 25% target by 2025.Despite challenges, PLI schemes offer significant opportunities:New Sectors and Policies: The National Manufacturing Mission, which was announced in 2025, will enhance domestic value addition in solar PV cells, EV batteries, and wind turbines. The government is also considering reimbursing plant setup expenses to accelerate investment recovery, resolving subsidy delays.Job Creation: The schemes are expected to generate 1 crore jobs (direct and indirect) by 2026, with MSMEs dominating sectors such as textiles and drones.Export Expansion: PLI schemes are likely to produce USD 520 billion worth of production by 2026, with the export of telecom equipment alone estimated at INR 2 lakh crore.The resurgent application window for white goods (ACs and LEDs) in 2024 saw investments of INR 3,516 crore, reflecting sustained industry interest.The PLI programmes have initiated development in electronics and auto industries, generated employment, and attracted foreign investment, making India a rival to China as a supply chain alternative. Nevertheless, bureaucratic red tape, import dependence, and uneven sectoral performance have restrained their influence. Without fixing these problems, the vision of 25% manufacturing GDP contribution by 2025 is still elusive.