Definition
PLI Scheme
The Production Linked Incentive scheme offers financial incentives to manufacturers based on incremental sales of goods made in India, to boost domestic production.
Under a PLI scheme, the government pays eligible companies an incentive calculated as a percentage of their incremental sales of locally manufactured products over a base year, for a defined period. Schemes have been rolled out across sectors such as electronics, pharmaceuticals, automobiles, textiles and solar modules.
The aim is to make Indian manufacturing globally competitive, attract investment, deepen supply chains and reduce import dependence, in line with Atmanirbhar Bharat. By tying payouts to actual output and investment, PLI seeks to reward performance rather than merely subsidising capacity.
Related terms
- Basic Customs DutyBasic customs duty is the primary tariff levied on imported goods as a percentage of their assessable value, forming the core of India's import tax.
- NITI AayogNITI Aayog is the government's policy think tank, which replaced the Planning Commission and advises on long-term strategy and cooperative federalism.
- Atmanirbhar BharatAtmanirbhar Bharat is the government's self-reliant India policy thrust aimed at boosting domestic manufacturing, reducing import dependence and supporting local industry.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.