As the first part of this series said, India is trying to become a manufacturing powerhouse in a clutch of old and new sectors.
Its timing is propitious. After COVID-19, countries don’t want too much geographical concentration in their supply chains. They seek an alternative to China. In tandem, in a clutch of emerging sectors like batteries, semiconductors and electrolysers, countries are jockeying for dominance. Hitherto energy importing countries are vying to become exporters—of new technologies, the equipment used to produce renewable energy, or the energy itself.
India is hoping to capitalise on both trends. Its policy instrument, however, is a tad untested. The production-linked incentive scheme, as the first part of this series said, stands on three pillars—a disability cost it will pay manufacturers to offset losses due to India’s lack of manufacturing competitiveness; a focus on creating a few champions in each sector where India wants competitive advantage; and atmanirbharta, or maximal localisation in each value chain to reduce dependence on other countries.
Much of this is a departure from previous efforts to boost India’s manufacturing competitiveness. To understand if PLI will help India create the technological leaders of tomorrow, CarbonCopy studied the PLIs for solar and batteries.