PLI push for IT, hardware & pharma; here’s what experts say

In a bid to boost manufacturing and shore-up job creation, the government announced the expansion of production linked incentive (PLI) scheme to pharma and IT hardware industries.

First let's start with pharma where the outlay is Rs 15,000 crore. The PLI scheme will be applicable for three different categories of companies.

Those with global manufacturing revenue of Rs 5,000 crore will be classified into group A and incentives worth Rs 11,000 crore would be made available to them. The government expects the PLI scheme will be implemented over eight years, beginning 2020-21, to create 20,000 direct and 80,000 indirect jobs.

The government has also approved a PLI scheme worth over Rs 7,300 crore for promoting the manufacturing of IT hardware. These include laptops, tablets, all-in-one personal computers and servers among others.

Kiran Mazumdar-Shaw, Executive Chairperson of Biocon, said, “It is very important to focus on some of the emerging opportunities that India has in terms of improving and augmenting its stature in pharmaceuticals of global markets. The segments chosen are very important areas to invest in and Korea has done this very effectively over the decade long investment in biologics and biosimilar and today they command dominant 43 percent of market share in biosimilars."

"I think that is what India is also beginning to emulate under this PLI scheme. But biopharma which is essentially biosimilars, complex generics is where we really need to start building scale if we have to really take a big chunk of the global market share.”

“This is a welcome step, it is a good starting investment in this sector but I think a lot more have to be invested because if we really want to attain a global scale that we are talking about then obviously Rs 11,000 crore is not enough.”

While giving his take on PLI scheme for IT sector Pankaj Mohindroo, Chairman at ICEA, said, “IT hardware is $ 200-225 billion industry market so it was extremely appropriate that we take a place in that. While we are not aspiring to be global leaders to begin with, we will take at least 20 percent share of the global manufacturing in this. Now the amount, the outlay, I would say is little less than what we were aspiring for, but better than the initial outlay of Rs 5,000 crore.”