Program Lapsing
The Indian government is letting its $23 billion PLI scheme, designed to boost domestic manufacturing, lapse.
It won't be expanded beyond the 14 pilot sectors, and deadlines won't be extended.
Program's Performance
Despite attracting 750 companies, the program fell short of its goals.
Production targets were missed, and subsidy payouts were delayed.
Manufacturing's share of India's economy has actually decreased since the program's launch.
Companies faced issues like slow subsidy payouts and bureaucratic hurdles.
Some companies were denied subsidies due to non-compliance with rules.
Excessive red tape slowed down the scheme's effectiveness.
The program did see success in the pharmaceutical and mobile-phone manufacturing sectors.
Alternatives
The government is now considering partially reimbursing investments to incentivize manufacturing.
The government is still intending to boost manufacturing in India, and is looking for alternative methods.
External Factors
India's manufacturing ambitions are also affected by the global trade environment, including U.S. trade policies.
The program was launched at a time when companies wanted to move manufacturing away from China, but India had difficulties capitalizing on that moment.
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