Target Segments under PLI shall mean two segments viz. Mobile phones and Specified Electronic Components as mentioned below:
Qualification Criteria for applicants under different Target Segments in the Scheme are as defined:
PLI Scheme is an outcome- and output-oriented scheme where incentives will be paid only if the manufacturers make the goods.
Sunrise sectors are promising sectors but they may need support in the initial stage.
This scheme will give cash incentives for five to seven years and all the sunrise and important sectors are proposed to be covered in this.
The sectors may be automobile, networking products, food processing, advanced chemistry and solar PV manufacturing.
Export base can be developed in sectors under PLI scheme.
There is a growing demand in the world for diversification in supply chains and India can become a major player.
The scheme shall only be applicable for target segments.
With the view to make India a manufacturing hub, the government launched the PLI scheme for mobile phones (electronic manufacturing) and it was extended to pharma products and medical equipment sectors. It now extends to 13 sectors till date.
There will be an all-India rollout of the scheme.
Implementation of the plan shall be carried out by a Project Management Agency (PMA).
The PMA is responsible for evaluating applications and proposals, verifying eligibility for support, scrutinizing claims that are eligible for incentive payments, and so on
An incentive will be paid under this scheme over six years, ending in 2026-27. An incentive due for payment for a particular year will be due in the subsequent year. During the contract period of 2021-22 to 2026-27, the scheme will last for six years.
The fund limit of the scheme, i.e. the cost shall not exceed the approved amount, is imposed. An incentive award maximum shall be determined in advance for each beneficiary at the time of their approval. There shall be no exceeding of this maximum regardless of achievement/ performance.
This program is expected to promote the expansion of processing capacity by 2026-27, which will enable processed foods worth 33,494 crore as well as providing jobs for almost 2.5 lakh people.
The companies approved under the scheme are expected to generate the following:
The distribution of incentive under different situation shall be as per the following:
The Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing proposes a financial incentive to boost domestic manufacturing and attract large investments in the electronics value chain including mobile phones, electronic components and ATMP units. Production Linked Incentives of up to 40,951 crores will be awarded over a period of 5 years.
The Production Linked Incentive Scheme for IT Hardware proposes a financial incentive to boost domestic manufacturing and attract large investments in the value chain. The scheme seeks to incentivize companies to utilize the existing installed capacity to fulfill the increasing domestic demand. Product Linked Incentives of upto 7,300 crore will be awarded over a period of 4 years.
The Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme seeks to strengthen the infrastructure base for the electronics industry and deepen the electronics value chain in India. The development of industry-specific facilities like Common Facility Centers, Ready Built Factory, Sheds/Plug and Play facilities will not only strengthen supply chain responsiveness and promote the consolidation of suppliers but also decrease time-to-market and lower logistics costs. EMC 2.0, therefore, provides financial incentives for creating quality infrastructure as well as common facilities and amenities for electronics manufacturers. Financial Incentives of up to 3,762 Crore will be disbursed over a period of 8 years.Highlights
The Modified Electronics Manufacturing Clusters (EMC 2.0) scheme has been notified to support creation of quality infrastructure with common facilities and amenities, including Ready Built Factory (RBF) sheds/ Plug and Play facilities. This will attract major global manufacturers along with their supply chains to set up a production base in India. Under the scheme, financial assistance of 50% of the project cost will be provided to EMC projects subject to a ceiling of 70 Crore for every 100 acres of land while 75% of the project cost will be provided for Common Facility Centres (CFCs) subject to a ceiling of 70 Crore. The scheme will be open for applications for a period of 3 years from the date of notification and disbursement of funds to the approved projects will be done in a period of 5 years. EMC 2.0 scheme has an outlay of about USD 500 Mn.
The amount of non-refundable application fee is 1,00,000/- (Rupees one lakh only) shall have to be paid electronically through Bharat kosh Portal: https://bharatkosh.gov.in/ - Non-Tax Receipt portal of Government of India. The online fee payment process through Non-Tax Receipt Portal – NTRP (Bharat Kosh) is mentioned below:-
The PMP aimed to increase the share of locally-procured components in the manufacturing of mobile phones leading to the setting up of a “robust indigenous mobile manufacturing ecosystem in India.
The PMP incentivised the manufacture of low value accessories initially, and then moved on to the manufacture of higher value components.
This was done by increasing the basic customs duty on the imports of these accessories or components.
These offer new local jobs and domestic production opportunities.
Currently, somewhere between 80 to 90% of production is taking place on a local level.
The program will become even more cost-effective when a local supply chain is founded.
It will also enjoy more control with an India-based assembly line as this includes local sourcing and assembly.
Another benefit of PMP is that it lays the foundation for future production industry growth.
The program will also provide future incentives to increase production in sub-industries, including assembly and components.
This saves money on many levels since it reduces dependence on imports
it’s already becoming more cost-effective to produce parts domestically. The government’s incremental strategy aims to help the industry better plan its investments.
Low Level of Participation in Global Value Chains (GVCs): India’s participation in GVCs has been low compared to the major exporting nations in East and Southeast Asia.
On the contrary, export growth of capital intensive products from China has been mainly driven by its participation in the GVCs.
China’s export promotion policies since the 1990s have relied heavily on a strategy of integrating its domestic industries within the GVCs.
With low participation in GVCs have resulted in a disproportionate shift in India’s geographical direction of exports from traditional rich country markets to other destinations like African countries.
Shift from China is unlikely: Chinese firms that dominate the Indian market are not a part of the PLI policy.
Thus, their capacity expansion, if any, will be in addition to this. India produced around 29 crore units of mobile phones for the year 2018-19; 94% of these were sold in the domestic market, with the remaining being exported.
Though the schemes like the PMP and PLI are well intended there are doubts over the benefits that can accrue from these.
The value addition in India remains very low, with most of the firms recording below 10%.
A large percentage of the inputs going into electronic manufacturing in India are being imported. This is as high as 85%.
Compared to economies such as Vietnam, Korea and Singapore which export more mobile phone parts than imports, India, on the other hand, imported more than it exported.
In 2019 Indian imports of mobile phone parts were 25 times the exports.
This indicates the lack of facilities that add value to the imported parts before exporting them. Therefore, while the PMP policy increased the value of domestic production, improvement in local value addition remains a work-in-progress.
The Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing notified on April 01, 2020 shall provide financial incentive to boost domestic electronics manufacturing and attract large investments. The Scheme shall extend an incentive of 4% to 6% to eligible companies on incremental sales (over base year i.e. 2019-20) of manufactured goods including mobile phones and specified electronic components for a period of five (5) years subsequent to the base year.
Target Segments under PLI shall mean two segments viz. Mobile phones and Specified Electronic Components as mentioned below:
|S. No.||Description of Goods|
|2||Specified Electronic Components|
|2.2||Discrete semiconductor devices including transistors, diodes, thyristors, etc.|
|2.3||Passive components including resistors, capacitors, etc. for electronic applications|
|2.4||Printed Circuit Boards (PCB), PCB laminates, prepregs, photopolymer films, PCB printing inks|
|2.5||Sensors, transducers, actuators, crystals for electronic applications|
|2.6||System in Package (SIP)|
|2.7||Micro / Nano-electronic components such as Micro Electro-mechanical Systems (MEMS) and Nano Electro-mechanical Systems (NEMS)|
|2.8||Assembly, Testing, Marking and Packaging (ATMP) units|
All the eight (8) categories of components are covered within the Target Segment “Specified Electronic Components”.
Applicant for the purpose of the Scheme is a company registered in India, proposing to manufacture goods covered under Target Segments in India, and making an application for seeking approval under the Scheme. The applicant can operate new or existing manufacturing facility (ies) to manufacture goods covered under the Target Segments (i.e. mobile phones and specified electronic components). The aforesaid manufacturing can be carried out at one or more locations in India.
In accordance with Para 6.1 of the Scheme, the Application Window shall be 4 months from the date of notification of the Scheme. Since the notification was published on 01.04.2020, applications under the Scheme shall be received upto 31.07.2020.
Qualification Criteria for applicants under different Target Segments in the Scheme are as defined:
In case the manufacturing revenue, in the target segment, of an entity (Group Company) is claimed and considered for two or more applicant companies, the manufacturing revenue of such entity in the target segment will be equally divided among the applicants that are claiming revenue of such entity. Only such share of manufacturing revenue in the target segment, that is obtained after division of manufacturing revenue of that entity (group company), will be considered for determining qualification for such applicant under the scheme.
If the Consolidated Global Manufacturing Revenue of the applicant company (including Group Companies) is available in a currency other than INR, the INR equivalent amount may be computed by applying an average of the exchange rate notified by the Reserve Bank of India as on the 1st day and last day of the reporting period.
Eligibility under the Scheme shall be subject to thresholds of Incremental Investment and Incremental Sales of Manufactured Goods (covered under Target Segments) over the base year as defined. An applicant must meet threshold criteria to be eligible for disbursement of incentive for the year under consideration.
To meet the threshold criteria of Incremental Investment for any year, the cumulative value of investment done till such year (including the year under consideration) over the Base Year (2019-20) shall be considered.
In order to meet the threshold criteria of Incremental Sales of Manufactured Goods covered under Target Segments for any year, the Total Sales of Manufactured Goods covered under Target Segments for such year over the Base Year, irrespective of Invoice Value (whether below or above 15,000 in case of Mobile Phones) shall be considered.
The applicant company will have to meet both threshold criteria i.e.incremental investment and incremental sale of manufactured goods over the base year to be eligible for disbursement of incentive under the scheme for a given year.
Eligibility shall be subject to thresholds of Incremental Investment and Incremental Sales of Manufactured Goods (covered under Target Segments) over the base year. An applicant must meet threshold criteria to be eligible for disbursement of incentive for the year under consideration. In case an applicant does not meet threshold criteria for any given year, the applicant shall not be eligible for incentive in that particular year. However, the applicant will not be restricted from claiming incentive in subsequent years during the tenure of the Scheme, provided eligibility criteria are met for such subsequent years.For example, if an applicant company is not able to achieve threshold Incremental Sales of Manufactured Goods between 01.08.2020 and 31.03.2021, they will not be eligible for incentive in Year 1. However, this will not impact eligibility for any subsequent year. They will be able to claim the incentive for subsequent years provided eligibility is met for the years under consideration.
To meet the threshold criterion for Incremental Investment in any year, the cumulative value of investment done till such year (including the year under consideration) over the Base Year i.e. 2019-20 shall be considered.For example, in case of Mobile Phones (with invoice value of 15,000 and above), the applicant company must invest 250 crore or more by 31.03.2021 to achieve threshold for incremental investment in that year. Similarly, a cumulative investment of 500 crore by 31.03.2022, 750 crore by 31.03.2023 and 1,000 crore by 31.03.2024 will have to be made to remain eligible under the scheme.
Threshold for Incremental Investment over Base Year is defined in terms of Cumulative Minimum Investment that must be achieved by the year under consideration. For example, in case of Mobile Phones (with Invoice value of 15,000 and above), a cumulative incremental investment of 500 Crore should have been made by the end of Year 2. For determining eligibility under the Scheme, Investment made on or after 01.04.2020 shall be considered. In case an applicant does not meet threshold criteria for any given year, the applicant shall not be eligible for incentive in that particular year. However, the applicant will not be restricted from claiming incentive in subsequent years during the tenure of the Scheme, provided eligibility criteria are met for such subsequent years.
All non-creditable taxes and duties would be included in such expenditure.
The expenditure incurred on land and building (including factory building / construction) required for the project / unit is not covered under the Scheme and, therefore, will not be considered for determining eligibility under the Scheme.
The Investment shall be considered only from the time the applicant company qualifies as a Domestic Company as per FDI Circular of 2017 or after 1st April 2020 whichever is later.
Eligibility under PLI Scheme shall not affect eligibility under any other scheme and vice-versa. A company may apply under both the schemes. However, eligibility criteria for both schemes will have to be fulfilled in accordance with the respective schemes and guidelines thereof. For example, investment by the applicant company will be considered under both PLI and SPECS provided it is eligible as per respective scheme guidelines. Further, incentive disbursal under PLI and SPECS scheme will be independent of each other and also not linked to eligibility and disbursement of incentives under any other central or state government schemes.
There is no restriction on the percentage of used / refurbished plant,machinery and equipment to be considered towards Investment under the Scheme. The used / refurbished plant, machinery and equipment allowed under the Scheme shall have a minimum residual life of at least 5 years as per Hazardous and Other Wastes (Management and Trans-boundary Movement) Rules, 2016, amended vide Ministry of Environment, Forest and Climate Change Notification dated 11.06.2018. Further, a valuation certificate by a Chartered Engineer assessing the value and residual life shall also be required. In case of import, such valuation should be in accordance with Customs Valuation Rules and Circulars. The value of these plant, machinery and equipment shall be considered as lower of depreciated value (as per scale of depreciation fixed by Customs, whether these plant, machinery and equipment are imported or not) and the value assessed by Chartered Engineer (of India) or equivalent overseas chartered engineer.
The number of applications allowed per Applicant Company for support under the Scheme shall be restricted to one. Each application shall be limited to one of the Target Segments. However, an applicant may make another application for a particular Target Segment if the previous application has been rejected and closed by MeitY / PMA post examination.
Based on the initial scrutiny of the application, acknowledgement is issued by the Project Management Agency (PMA) appointed for this purpose by MeitY. However, the acknowledgement of an application shall not be construed as approval under PLI Scheme.
Eligibility under the Scheme is subject to thresholds of Incremental Investment, and Incremental Sales of Manufactured Goods covered under Target Segments as defined. Accordingly, a baseline for Investment and Sales of Manufactured Goods will have to be established to determine eligibility and compute incentive amount due.
The period for determination of baseline shall be as follows:
Baseline Sales of Manufactured Goods for the Target Segment will be determined based on sales of goods manufactured for the Target Segment in the base year by the applicant company, in India. In case of Mobile Phones (with Invoice value of 15,000 and above), baseline calculation will be done for the eligible product also, and incentive will be payable on the incremental sale of such Mobile Phones (with Invoice value of 15,000 and above) over the base year, provided the eligibility criteria are met by the applicant.For first year (i.e. FY 2020-21), the baseline for sale of manufactured goods shall be determined for the period from 01.08.2019 and 31.03.2020.
An applicant may submit a claim for disbursement of incentive as early as the end of the quarter in which the eligibility criteria for the year in consideration have been met. Claims for disbursement of incentive may be submitted only on a quarterly or half-yearly or annual basis. Claims for any period shall be made only once, unless withdrawn, and no subsequent part claims shall be allowed for the said period.
The items listed under the Target Segment, ‘Specified Electronic Components’ are agnostic to end-use or application and any company proposing to manufacture the items listed under the Specified Electronic Components (refer Annexure 1 of the PLI Guidelines) is eligible to apply under PLI Scheme subject to other eligibility and qualification criteria mentioned in the scheme notification and PLI guidelines.
Annual Ceiling on incentive payable to each applicant will be determined based on Financial Outlay as indicated in Para 8.1 of the Scheme and number of eligible applicants in each of the target segments. The annual financial outlay will be appropriated proportionately depending on number of applicants under each target segment. At the end of the year, any un-appropriated incentive amount resulting from underperformance with respect to the prescribed annual ceiling on Net Incremental Sales, by any applicant(s) in any target segment, will be allocated to the remaining eligible applicants under such target segment who have achieved Net Incremental Sales in excess of the annual ceiling.Such incentive amount will be distributed only to the extent of excess performance by an applicant beyond the annual ceiling of net incremental sales of eligible product. If the incentive amount payable on cumulative excess performance by the applicants in a target segment is greater than the un-appropriated incentive amount, then the sum of incentives payable beyond the ceiling amount for each applicant will be restricted to the un-appropriated incentive amount for such target segment and such amount will be distributed among the over-performing applicants in proportion to their respective excess performance beyond the annual ceiling of Net Incremental Sales.
Illustratively, if there are five (5) eligible applicants under Mobile Phones (Invoice Value of 15,000 and above) target segment, the year-wise incentive ceiling per applicant will be 1/5th of the annual financial outlay for the said target segment. In case of underperformance by say 2 applicants, the un-appropriated amount relating to these applicants will be allocated to the 3 remaining applicants in proportion to their performance in excess of the annual ceiling of Net Incremental Sales. Excess incentive payable to each of these 3 applicants will be capped to the lower of the following:
The Applicant needs to upload the following mandatory documents along with the information submitted in the application form.Company Structure:
Note: Any other document may be sought by PMA / MeitY for clarifications.
The company needs to fulfill the qualification and eligibility criteria for the target segment which is Specified Electronic Components and not for individual items. Therefore if a company is manufacturing both capacitors and PCBs, the incremental investment and incremental sales of manufactured goods considered for the purpose of determining eligibility and applicable incentive will be a sum for the two items i.e. the criteria has to be met after combining all items covered within the target segment and not individually.
For the purpose of appraisal and approval under the PLI Scheme, the Competent Authority shall be defined as per delegation of powers for appraisal and approval of Public Funded Schemes and Projects vide OM No. 24(35)/PF-II/2012 dated 05.08.2016 issued by Department of Expenditure, Ministry of Finance or any subsequent modifications thereof.
For the purpose of disbursal under the PLI scheme, Competent Authority will be as per procedure applicable in the Ministry for disbursement under other schemes.
The Production Linked Incentive (PLI) Scheme for White Goods (PLIWG) as notified on April 16, 2021 shall provide financial incentive to boost domestic manufacturing and attract large investments in the White Goods manufacturing value chain. Its prime objectives include removing sectoral disabilities, creating economies of scale, enhancing exports, creating a robust component ecosystem and employment generation. The PLI Scheme shall extend an incentive of 4% to 6% on net incremental sales (net of taxes) over the base year (FY 2019-20) of goods manufactured in India or net incremental sales of eligible products over the base year or FY 2020-21, whichever is higher, as the case may be and covered under target segments, to eligible companies, for a period of five (5) years subsequent to the base year and gestation period as specified in the scheme guidelines.
Applicant for the purpose of the Scheme shall be any company incorporated in India and as defined under the provisions of the Companies Act 2013, to manufacture one or more eligible product(s) under the specified target segment(s) and making an application for seeking approval under the Scheme.
Any company incorporated in India and as defined in the Companies Act 2013, proposing to manufacture one or more eligible product(s) under the specified target segment can be an applicant. LLPs are not covered under the Companies Act, 2013. Therefore, LLPs cannot avail PLI benefits under this Scheme.
Any company incorporated in India and as defined in the Companies Act 2013, proposing to manufacture one or more eligible product(s)under the specified target segment can be an applicant. The Section 2(20) of the Companies Act, 2013, defines the term ‘Company’ as “Company means a company incorporated under this Act or under any previous company law.” Hence, the companies incorporated under the Companies Act, 1956, are also eligible to file an application under PLI scheme of white goods.
“New manufacturing facility” under brownfield definition means fresh investment on new Plant, Machinery & Equipment, Research & Development, Transfer of Technology and Associated Utilities, for manufacturing of eligible product(s) under the respective target segment in addition to any existing manufacturing facilities in a premise.
The applicant may not prepare a separate P & L Account or Balance Sheet but shall have separate ledgers, Trial Balance, Supporting Bills, Invoices & Vouchers etc. for eligible investment made under the scheme and ensure that the assets created out of the eligible investment made by the applicant under the scheme and production from such assets is clearly identifiable.
Support under the Scheme shall be provided to companies engaged in manufacturing of components of Air Conditioners and LED Lights in India. The list of Target segments and Eligible products are as under:1) Target Segment and Eligible Products – Air Conditioners
|Sl.||Target Segment||Large Investment||Normal Investment|
|1.||ACs (Components)||(i) High value Intermediaries of ACs
(ii) Low Value Intermediaries of ACs
(iii) A combination of (i) and (ii)
|2.||High Value Intermediaries of ACs||(i) Compressors including oil free and high capacity
(ii) Copper Tube (plain and/or grooved)
(iii) Aluminum Stock for Foils or Fins for heat exchangers
|3.||Low Value Intermediaries of ACs/td>||(i) Control Assemblies for IDU or ODU or Remotes
(ii) Display Panels (LCD/LED)
(iv) Cross Flow Fan (CFF)
(v) Valves & Brass components
(vi) Heat exchangers
(vii) Sheet Metal components
(viii) Plastic Moulding components
|Sl.||Target Segment||Large Investment||Normal Investment|
|1.||LED (Core Components)||(i) LED Chip Packaging
(ii) Integrated Circuits (ICs)
(v) Large-scale investments in LED components
|2.||LED (Components)||(i) LED Chips
(ii) LED Drivers
(iii) LED Engines
(iv) LED Modules
(v) Printed Circuit Boards (PCB) including Metal clad PCBs
(vi) Mechanicals- Housing
(vii) Wire Wound Inductors
(viii) Drum Cores
(ix) Heat Sinks
(xi) Ferrite Cores
(xii) LED Light Management Systems (LMS)
(xvi) LED Transformers
(xvii) Laminates for Printed Circuit Boards and Metal Clad PCBs
(xviii) Metalized film capacitors
The objective of the scheme is to boost domestic manufacturing and facilitate development of a robust ecosystem for component manufacturing across the value chain in the country for Air conditioners (ACs) and LED Lights. Accordingly, finished goods have not been included under the Scheme.
Investments on setting up manufacturing facilities for components of compressor or any other AC components by a selected applicant as part of backward integration shall be considered as eligible investment under the scheme. However, any component of eligible products not listed in the list of eligible products in Appendix-II of the Scheme Guidelines, shall not be considered in the net sales turnover of eligible products.
There are two investment categories under each Target segment as given below. An applicant can apply under any one of following investment categories for any one target segment:
The Incremental investment over base year shall mean the eligible cumulative incremental Investment made by the applicant on or after April 1, 2021.
Yes. The Target Segment “ACs Components” provides an option to choose combination of multiple eligible products along with stipulated threshold investment. For e.g. An applicant may choose to manufacture “Compressors” from the target segment of “High Value Intermediaries of ACs” and “Motors” from the Target segment of “Low Value Intermediaries of ACs” under any one of the two investment categories (Large/Small Investment) by applying under the target segment “ACs (Components) and choosing A Combination of (i) and (ii) as defined in Appendix –II of the scheme guidelines
The initial Investment period (Gestation period) is the gestation time given for setting up of manufacturing facilities to manufacture the eligible products. An applicant may opt for any one of the following initial investment periods–
In case of Group Companies of the applicant whose revenues for the base year have not been consolidated in Rupees, the revenue in the respective currency shall be converted to Rupees at an average of currency exchange rates as on 01.04.2019 and 31.03.2020 or as on 1.04.2020 and 31.03.2021 as the case may be.
The amount of minimum cumulative investment to be made by the applicant in each financial year for respective target segment as specified in Appendix-I of the Scheme Guidelines.
The tenure of the Scheme shall be from Financial Year 2021- 22 to Financial Year 2028- 29.
The Scheme is Fund Limited. The amount of incentive shall be capped on the following basis:
For Air Conditioners - net incremental sale of eligible product(s) upto 5 times of the cumulative threshold investment in the previous financial year.
For LED Lights - net incremental sale of eligible product(s) upto 6 times of the cumulative threshold investment in the previous financial year.
Over performance of any selected applicant shall not be incentivised and the amount of incentive arising out of underperformance of any selected applicant in any target segment shall not be disbursed to any other applicant.
|Sl.||Target Segment||Large Investment||Normal Investment|
|Gross Block||Global Revenue||Net Worth||Gross Block||Global Revenue||Net Worth|
|2||AC (High Value Intermediaries)||200||1000||120||125||500||75|
|3||AC (Low Value Intermediaries)||50||250||30||25||100||15|
|4||LED (Core Components)||150||750||90||50||200||30|
Yes. Companies meeting the pre-qualification criteria on the basis of audited financial statements for FY 2020-21may also apply under the scheme.
No. Value-Added Resellers do not qualify under the scheme.
An applicant availing benefits under any other PLI scheme of Government of India for the same product(s) shall not be eligible under this PLI scheme.
As per Clause 5.10 of the Scheme Guidelines, Govt. on recommendations of the Committee of Experts, may relax pre-qualification criteria specified in Clause 5.6 for an applicant.
The Scheme does not intend to create any entry barrier for investments and offers incentives on fresh investments in a Greenfield or a Brownfield project with same Investment: Sales ratio. Hence, it would not be prudent to provide any relaxation to the Brownfield projects.
It is recognized that Applicants, particularly who have formed new entity under Companies Act, 2013, may require some time to decide upon to finalize suitable location of manufacturing plant. Hence, it is not mandatory to indicate the exact location of plant in the on-line application form. However, Applicant must indicate at least the name of the District during submission of on-line application form and submit the exact location of the plant within three months of the receipt of the communication of selection by the PMA.
Selected applicants would be allowed to submit the details of additional location with all relevant documents within two years of commencing commercial production during the tenure of the Scheme.
As provided in Clause 6.4 of the scheme guidelines, an applicant proposing to manufacture more components in the entire value chain will have the higher priority in selection.
At least 60% of the net incremental sales shall comprise of the Eligible Product used in the manufacturing of ACs and LED Lights. Hence 40% of net incremental sales across other sectors shall be permitted to facilitate economies of scale.
No. Both the criteria are to be met. Eligibility shall be subject to achievement of thresholds of net incremental sales of Eligible Products for the respective financial year over the base year or net sales turnover of eligible products in the base year or FY 2020-21, whichever is higher, as the case may be and cumulative incremental investment in the preceding financial year, which shall not be less than the threshold investment as detailed in Appendix-I or Appendix-IA of the Scheme Guidelines, as the case may be.
Front loaded investment will qualify as eligible investment subject to the same is equal to or more than the corresponding stipulated cumulative incremental investment and threshold investment for a respective financial year as prescribed in the scheme guidelines. However, eligibility of PLI shall be subject to achievement of thresholds of net incremental sales of Eligible Products for the respective financial year over the base year or net sales turnover of eligible products in the base year or FY 2020-21, whichever is higher, as the case may be and cumulative incremental investment in the preceding financial year, as detailed in Appendix-I or Appendix-IA of the Scheme Guidelines.
In case an applicant does not meet criteria of threshold investment and threshold net incremental sales for any given year, the applicant shall not be eligible for disbursement of incentive for that particular financial year. However, the applicant will not be restricted from claiming incentive for subsequent years during the tenure of the Scheme, provided eligibility criteria of cumulative committed investment and threshold net incremental sales are met for such subsequent financial years.
Midway exit by a selected applicant without fulfilling investment criteria, will thwart one of the selection criteria of maximizing Gross Value Added to economy, as also deprive selection opportunity to another Eligible Applicant under the scheme. Therefore, if any selected applicant declines the offer of approval under the Scheme at any stage or exits the scheme without making full committed investment for reasons whatsoever; in such case,
Yes. As the selected applicant has achieved the threshold of net incremental sales, it will qualify for PLI. The Scheme provides flexibility to an applicant to choose eligible products under a Target segment and manufacture as per the market conditions.
All non-creditable taxes and duties shall be included in such expenditure.
No. Investment in land and building (including factory building or construction) required for the project or unit will not be covered under the Scheme and, therefore, shall not be considered for determining eligibility under the Scheme.
The application window for the Scheme shall be open for period from 15th June 2021 to 15th September, 2021 (inclusive) on on-line portal having URL as https://pliwhitegoods.ifciltd.com/. No application shall be accepted after the closure of the application window. Applications may also be invited anytime during the tenure of Scheme for any particular target segment, if required.
No. One entity can apply for any one category under one target segment only. However, separate Group companies may apply for different target segments.
One applicant can apply for any one target segment only. However, an Applicant may apply for any one or more eligible products within a Target Segment as defined in Appendix-II of the Scheme Guidelines.
As per Clause 9.4 of the Scheme Guidelines “One entity may apply for any one category under one target segment only. However, separate Group companies may apply for different target segments.” Hence, in the given case, company B and company C cannot apply for same target segments but can apply for different target segments. However, those target segments should not be the same as opted by company A.
Upon successful submission of an application, based on the initial scrutiny of the application, acknowledgement with a unique Application ID number shall be communicated to the applicant over email as well as through SMS by the Project Management Agency (PMA) appointed for this purpose by DPIIT. It may be noted that the acknowledgement of an application shall not be construed as approval under PLI Scheme.
In case an application is submitted on the last day of application window, the PMA shall inform about the deficiency in the application, if any, to the applicant within 15 days of submission, where after, the applicant must submit the application completed in all respect by last day of the month following date of application window closure. Acknowledgement will thereafter be issued by the PMA.
The above scenario will not be treated as “non-compliance” under Clause 10.9 of the Scheme Guidelines, as achievement of net incremental sales for any particular year and committed cumulative investment in the preceding year are the criteria for attaining eligibility of incentive for any particular year and does not form any matter of compliance. If the same are not achieved, the applicant will not be eligible to receive the incentive. The bank guarantee will be invoked as per the provisions of clause 10.7 i.e. if commercial production is not achieved within 1 year of the original proposed date of commercial production or as per the provisions of clause 10.9 largely dealing with issues viz. obtaining approval under the scheme on the basis of false information, declining of offer after selection, failure to submit requisite supporting documents viz. auditors certificate to substantiate claim for incentive etc.
In case an applicant makes higher investment than the threshold investment, the threshold incremental sale to be achieved by the applicant for achieving eligibility for incentive shall remain same for respective target segment as specified in Appendix-I or Appendix-IA of the scheme guideline, as the case may be.
Yes. Captive Consumption of eligible products shall form part of Net Sales Turnover, subject to 60% of the captive consumption shall comprise of the Eligible Products used in the manufacturing of ACs and LED Lights.
The transaction price for eligible product(s) between the independent unrelated parties (i.e. comparable uncontrolled price) shall be used to compute the gross sales turnover of the eligible product(s) which may be based on sales through service channel or market operating price, depending upon the availability of information in the market.
An applicant shall submit a claim for disbursement of incentive on annual basis for the sales made in a financial year along with its audited financial statements. Claims shall be made only once, unless withdrawn, and no subsequent part claim shall be allowed for the said period. Claim for disbursement of incentive shall be filed by the applicant latest by 31st October in the following financial year to which the claim pertains.
Actual disbursement of PLI for a respective year will be subsequent to that year. For example, if the applicant chooses initial Investment period as 1st April 2021 to 31st March 2022 then subject to fulfilling the conditions of cumulative threshold investment up to FY 2021-22 over base year and threshold incremental sales of manufactured goods over the base year in FY 2022-23, PLI will be disbursed in FY 2023-24. Likewise if the applicant chooses initial Investment period as 1st April 2021 to 31st March 2023 then subject to fulfilling the conditions of cumulative threshold investment up to FY 2022-23 over base year and threshold incremental sales of manufactured goods over the base year in FY 2023-24, PLI will be disbursed in FY 2024-25.
No. The Scheme entails maximization of Gross Value Added (GVA) to the economy. Accordingly, the scheme stipulates eligible investment only in new plant, machinery and equipment and associated utilities to ensure that the productive assets remain in the economy for longer duration, aiding employment generation and contributing to the country’s GDP for a longer period in comparison to refurbished pant & machinery.
No. Investment in second hand/ used/ refurbished plant, machinery, equipment, utilities shall not be considered as eligible investment.
Yes. Change in shareholding is permitted in the Scheme Guidelines vide Clause 14.6.1, which states that “A selected applicant shall intimate the PMA of any change in shareholding pattern during the tenure of the scheme”. Further the clause states that in case of change in Successor in- Interest (including Change in Ownership) (Refer clause 2.37 for definition) the same shall be intimated by PMA for approval of DPIIT for disbursement of incentive.
The amount of non-refundable application fee is 1,00,000/- (Rupees one lakh only) shall have to be paid electronically through Bharat kosh Portal: https://bharatkosh.gov.in/ - Non-Tax Receipt portal of Govt. of India.
No, Interest during Construction (IDC) is not included in eligible investment.
Cost of foundation being an expenditure on civil work, the same is not allowed as part of cost of plant and machinery.
The Applicant needs to upload the following mandatory documents along with the information submitted in the application form.
The online fee payment process through Non-Tax Receipt Portal –NTRP (Bharat Kosh) is mentioned below:-
In such case, only basic price i.e. the cash down price of capital goods will be considered as Investment but not the interest charged by supplier for the credit period.
PLI stands for “Production Linked incentive”. The PLI scheme for specialty steel notified by Ministry of Steel, Govt. of India vide Gazette notification no.F.No.S21018/1/2020-TRADE-TAX- PART (1) dated 29th July, 2021. The objectives of the PLI scheme for specialty steel is to promote manufacturing of special steel grades within the country and help the Indian steel industry mature in terms of technology as well as move up the value chain.
The scheme covering Specialty steel grades shall be applicable to the following five (05) indicative broad product categories:
These are further sub-divided into various product sub-categories.
The annual incentive outlay and total incentive outlay over the scheme period are as indicated below:
|Financial Year||Outlay (in Cr)|
Incentive under the scheme shall be provided for a maximum period of five (5) years. The period of five (5) years shall commence from FY 2022-23 (incentive to be released from FY 2023-24). The initial year may, however, be deferred by up to two (02) years in case of specific product categories within the overall budgetary allocation. The release of incentive will be from FY 2023-24 to 2027-28 (FY 2025-26 to 2029-30, in case of deferment by two years) based on the achievements made by different companies in keeping with the details given in the guidelines.
|Tenure for Production year||Tenure for Incentive disbursement year|
|As per Scheme||FY 2022 – 23 to FY 2026-27||FY 2023 – 24 to FY 2027-28|
|In case of specific product categories, deferment by two (2) years||FY 2024 – 25 to FY 2028-29||FY 2025 – 26 to FY 2029 – 30|
If considered necessary, due to any special/adverse circumstances (Force majeure condition), the selected company(ies) may be allowed to avail the incentive within an extended period of up to one (01) year by allowing deferment of the initial year (FY2022- 23) with PLI payable in FY2023-24 by one year i.e. to FY2023-24 (with PLI payable in FY 2024-25) but the overall period for availing incentive being limited to a maximum Period of five (05) years with the approval of Empowered Group of Secretaries (EGoS).
Individual company/group companies or JV registered in India under the Companies Act 2013, desirous of manufacturing identified specialty steel grades, shall be eligible to apply for incentive under the scheme. The company shall ensure end-to-end manufacturing of applied product sub-category domestically, where the input material is melted and poured within the country using iron ore/scrap/sponge iron/pellets, etc. Third party outsourcing is allowed upto 20% value addition. However, an applicant must meet the criteria as specified in the scheme guidelines.
A company may apply for availing benefits under the scheme through an online portal dedicated for the purpose.
However, after on line submission, the applicant is required to submit the signed copy of the submitted application along with all the uploaded documents within 10 days from date of on line submission.
Yes, a non-refundable and one-time application fees of 1 lakh (plus applicable GST) for each application needs to be paid as per the prescribed mode of payment, without which no application shall be evaluated.
All applications shall be submitted along with uploading of the supporting documents through an online portal to the Project Management Agency (PMA). A physical copy of the submitted application duly signed by the authorized signatory along with all supporting documents needs to be submitted at the address, (which will be notified separately), within 10 days of the submission of on-line form.
The Scheme will be implemented through a Nodal Agency referred as Project Management Agency (PMA) which will be responsible for providing secretarial, managerial and implementation support and carrying out other responsibilities as assigned by Ministry of Steel/ respective Ministries from time to time.
A time period of 90 days shall be allowed for the filing of application from the date, as may be notified separately. No application shall be received after expiry of the due date so fixed.
A onetime correction window of fifteen days (15 days) after close of application submission shall be available for completeness of supporting documents only, uploaded along with the main application form. However, no change in the main application form will be permitted.
Yes, a company may apply for as many products category/ sub-category as it desires. However, it needs to submit separate application for each product sub-category along with non-refundable application fee. The investment for each applied product sub-category shall also be distinct.
Since the unit has become functional as a result of investment made prior to notification of the scheme, such applicant shall not be eligible.
It is the incremental production rate fixed by ministries in charge for a given product sub- category. Applicants are required to meet or exceed the threshold rate while committing annual incremental production rate to be eligible for participation in PLI scheme.
The major eligibility criteria are as follows:
Each applicant shall submit annual incremental production rate (%) year-wise along with production quantity over the scheme period against each applied product sub-category. The committed annual incremental production rate must be equal to or more than the respective threshold incremental production rate for each product sub-category.
No. Only the permissible investments done on or after the date of scheme notification i.e. July 29, 2021 are eligible under the PLI scheme.
While a detailed methodology of calculation of ranking shall be notified separately, however, there shall be 50% weightages to be assigned to committed annual incremental production during the scheme period and committed investment as per the list of permissible investments.
In case where the same rank has been secured by the eligible companies, the final selection shall be based on the following rules (in the following descending order)
The concept shall be applicable only to qualify at the time of incentive calculation. However, at the time of application, committed investment must equal or exceed unit investment. It is defined as the following for a particular sub-category:
For incremental production eligible for incentive in a year, the actual incremental production rate shall be equal to or more than the Limiting Incremental Production rate in that year. In case an applicant company is not able to meet Limiting Incremental Production rate, then no incentive shall be payable to the company for that year.
In case the actual permissible investment made by each selected company, is less than the limiting investment for a product sub-category, the selected company shall not be eligible for any incentive.
All non-creditable taxes and duties would be included in such expenditure.
Used/refurbished plant, machinery and equipment are not permitted towards Investment under the Scheme.
The annual incentive payable shall be capped at 200 crore per eligible company (including that of group companies/JV) across all categories or sub-categories of the target product segments.
Claims for disbursement of incentive shall be filed by the Selected companies within 7 months from the end of the financial year to which the claim pertains. For example, Claim for say, FY23-24 has to be submitted within 31st October, 2024.
The Applicant needs to upload the mandatory documents in support of the information submitted in the application form.
An Empowered Group of Secretaries (EGoS) shall be constituted to monitor the PLI scheme. The EGoS shall be headed by the Cabinet Secretary.
The Competent Authority shall be the Minister of respective departments or as delegated by him.
Yes, following selection of the applicant for a particular product sub-category, selected company has to submit a performance security @ 0.5% of the committed investment, against the unit capacity for that product sub-category, as notified in the scheme document or guidelines, along with the memorandum of understanding. The performance security is desired so that applicant while submitting application and to secure higher ranking, may not resort to giving unrealistic commitment on investment, capacity and year-wise incremental rate of production. The performance security has to be valid throughout the PLI scheme period.
Yes. A company applying for say, 3 product sub-categories, and if selected in each of them, shall have to submit three (3) different performance securities @0.5% of the committed investment against the unit capacity in each of the three product sub-categories, along with the respective Memorandum of Understanding.
Yes. In case, the company is unable to meet its committed production, thereby not able to claim for incentive, for the two consecutive years during the scheme period, his performance security may be en-cashed subject to approval by the competent authority.
The assessment of incremental production shall be made on the basis of the sales figures of the manufactured “Specialty Steel” grades. The sales figures shall be submitted by the selected companies along with audited certificates. The incremental production shall be thereafter worked out using the weighted average sales price.
Ministry of Steel (MoS) shall constitute and notify a “Grievance Redressal Committee” to oversee the complaints/ grievances arising out of the PLI scheme at any stage of the scheme.