India's PLI Review Finds Broad Manufacturing Gains, but Jobs Reach Only 28% of Target

Investment advances faster than job creation

India's production linked incentive schemes attracted Rs 2,40,138 crore in investment and generated Rs 22,66,412 crore in production by March 2026, yet employment reached just 28% of the programme's target. NITI Aayog's assessment puts nearly 70% of the targeted segments broadly on track, revealing a manufacturing push whose strongest investment gains have yet to translate into equally strong hiring.

The November 2026 Impact Assessment of PLI Schemes, prepared by NITI Aayog with the Indian Institute of Management Ahmedabad, examines 14 sectors through investment, production, employment and exports. It records 849,069 jobs and Rs 35,354 crore in incentive payments against a combined government allocation of Rs 1,91,049 crore.

Investment had reached 76% of its target of about Rs 3.15 lakh crore, while production and sales reached 64% of their target of about Rs 35.38 lakh crore. Employment was much further behind its target of approximately 30.18 lakh jobs. A lakh means 100,000, while a crore means 10 million.

The schemes had used 58% of their combined implementation period. Their different starting dates and industrial requirements matter: a mobile phone assembly operation can expand on a different timetable from a factory making advanced battery cells.

NITI Aayog Vice Chairman Ashok Kumar Lahiri placed the assessment within India's ambition to become a developed country by 2047, explaining why manufacturing matters beyond factory output.

Manufacturing has long been recognised as an engine of employment, innovation and productivity-led growth.

The practical test now is whether new factories can create more jobs, purchase more components from Indian suppliers and compete in export markets while government incentives remain available.

What does 70% on track mean?

NITI Aayog programme director Ishtiyaque Ahmed described roughly 70% of participating players and indicators as on track. That assessment covers performance within schemes, rather than declaring that every industry has met all its goals.

Four sectors were identified as on track across the assessment of investment, production, exports and employment: large scale electronics manufacturing, pharmaceutical drugs, telecommunications and networking products, and food products.

The report's executive summary uses a broader description of progress. It identifies electronics, pharmaceutical drugs, food processing, drones, medical devices and white goods as showing relatively strong results across several measures. Telecom, automobiles and speciality steel have encouraging investment and production figures but still need stronger employment, exports or domestic content.

NITI Aayog Chief Executive Officer Anurag Jain described six of the 14 schemes as "outstandingly successful". He also cited manufacturing growth at a compound annual rate of 10.44% over four years and attributed much of that growth to PLI. A compound annual rate describes the average yearly growth needed to move from the starting value to the final value.

The programme rewards additional production and specified performance. Its government allocation is the budget for incentives, while the investment figure measures money businesses put into factories and equipment. Those are separate flows of money with different purposes.

Why employment is the central weakness

The 849,069 jobs recorded in the assessment leave employment substantially further from its final target than investment or output. Against the 58% of combined scheme duration already completed, investment had reached 76% of target, production 64% and employment 28%.

Annual hiring performance also swung sharply. Employment reached 86% of the relevant target through 2022-23 and about 85% in 2023-24. It exceeded the annual target in 2024-25, reaching 156%, before falling to 31% in 2025-26.

Those percentages compare jobs created with each period's target. The fall to 31% therefore describes a shortfall against the latest annual goal, rather than a percentage decline in the number of people employed.

The assessment explains that factories usually absorb investment before they begin commercial production. Output then grows as equipment is commissioned and used more fully, with hiring developing as operations expand. Industries that rely heavily on expensive machinery and automation can also generate substantial output with fewer workers.

A broader tally accompanying the programme review puts direct and indirect employment at about 14.15 lakh, or roughly 1.42 million. That measure includes employment beyond the narrower 849,069 figure used in the target comparison. For readers tracking delivery against the employment goal, 28% is the relevant reported measure.

The programme's milestones show why a single final deadline cannot describe every sector's progress:

• 2022-23: Implementation began for the textiles scheme, giving it a shorter operating record than several other sectors.
• 2024-25: Aggregate annual employment performance reached 156% of target, while white goods domestic value addition reached 55%.
• March 2026: The main assessment cutoff recorded investment, production, employment and incentive payments across the schemes.
• November 2026: NITI Aayog published the assessment and outlined the case for changes with the responsible ministries.

Electronics leads, but components are the next test

Large scale electronics manufacturing, particularly mobile phones, stands out among the strongest performers. With an incentive allocation of Rs 34,193 crore, the scheme recorded Rs 20,580.20 crore in investment, Rs 11,61,505 crore in production and 169,249 jobs.

Electronics therefore accounted for approximately 51% of the programme's Rs 22,66,412 crore production total, using the figures in the assessment. Its employment represented about 20% of the 849,069 jobs recorded across the schemes. That concentration helps explain why strong manufacturing headlines can coexist with uneven progress elsewhere.

The report identifies growth in production, sales, exports and employment among both Indian and international companies. It also connects that expansion with the recently launched Electronics Component Manufacturing Scheme, which has an allocation of Rs 40,000 crore.

Components are the next practical challenge. Assembling a finished product in India creates activity, but making more of its valuable parts locally gives Indian suppliers a larger share of the business. The component scheme seeks to build on the scale already achieved in final manufacturing.

White goods shows how local suppliers can gain

The white goods scheme, covering air conditioners and LED lights, offers one of the clearest examples of production growth accompanied by deeper local manufacturing. By March 2026, it had attracted Rs 6,409 crore in investment, generated Rs 43,150 crore in production and created more than 52,703 jobs.

Domestic value addition rose from about 20% in 2019-20 to 55% in 2024-25, an increase of 35 percentage points. Domestic value addition means the share of a product's value created within India, rather than supplied through imported inputs.

The improvement involved components such as compressors, copper tubes, motors and electronic parts, alongside technology transfer through international partnerships. The scheme had participation from 80 firms, including 26 applicants classified as micro, small or medium enterprises.

Telecom presents a different picture. Its scheme recorded Rs 5,278 crore in investment, Rs 1,10,016 crore in production and 33,610 jobs by March 2026. Sales and exports recovered strongly in 2024-25 after a temporary slowdown in 2023.

Telecom manufacturing still depends heavily on imported components of high value, and the scheme does not mandate domestic value addition. It offers an additional 1% incentive for products designed, developed and manufactured in India. For local suppliers, the report's priority is to move more activity beyond final assembly into component manufacturing and technical capability.

Pharmaceutical gains vary by company and product

The Rs 15,000 crore pharmaceutical drugs scheme delivered broadly positive results across investment, production, employment and exports. Investment consistently exceeded targets, while larger companies benefited from their scale and access to international markets.

Large pharmaceutical firms accounted for roughly 61% of production under the scheme. Medium sized businesses improved steadily, but smaller firms had more uneven outcomes, particularly in exports, where access to customers and competitive scale remained constraints.

The separate Rs 6,940 crore bulk drugs scheme showed sharper differences among its four segments. Segment IV, covering certain materials, intermediates and active pharmaceutical ingredients made through chemical synthesis, performed strongest. Active pharmaceutical ingredients are the substances in medicines that produce their intended medical effect.

Segment I recorded a late but sharp production increase, Segment II grew gradually from a low base, and Segment III faced weaknesses across indicators. The assessment also found weak or partial export impact for bulk drugs.

Medical devices recorded Rs 1,151 crore in investment, Rs 14,945 crore in sales and 5,268 jobs. The assessment describes its employment impact as weak or partial, while the executive summary records gradual improvement and a recent move above employment targets. Investment consistently exceeded targets, but incentive payments remained relatively low and export information was limited.

Automobiles attract capital while batteries lag

The automobile and auto components scheme attracted Rs 44,326 crore in investment by March 2026, exceeding its projected investment target of Rs 42,500 crore. Incentivised vehicle units increased from 76,838 in 2023-24 to 12,84,650 in 2024-25, alongside expansion in electric vehicle production.

Employment reached 67,820 against a target of 148,147, or about 46%. Incremental sales stood at Rs 52,414 crore against a projected target of Rs 2,31,500 crore over five years. The figures show investment moving ahead much faster than the scheme's employment and sales goals.

Advanced chemistry cell batteries remain at a much earlier stage. The Rs 18,100 crore scheme aims to establish 50 gigawatt hours of manufacturing capacity, plus another 5 gigawatt hours for niche technologies. Only 1.4 gigawatt hours had been developed, equivalent to 2.8% of the main target. Commercial production and incentive payments had not begun.

Battery manufacturers faced gaps in technology, reliance on foreign expertise and imported machinery, shortages of skilled workers and delays in executing projects. India also lacked a sufficiently developed network supplying materials and components such as cathodes and anodes, the two electrodes inside a battery.

The scheme requires domestic value addition of 25% by the end of the second year and 60% by the end of the fifth. The assessment says those requirements appeared poorly matched to India's industrial base and contributed to delays. Slower growth than expected in electric vehicle demand also affected investment.

Solar, textiles and drones show different stages of progress

India's solar manufacturing capacity increased from 8 gigawatts to nearly 116 gigawatts. The assessment attributes about 24 gigawatts directly to projects supported by PLI, equivalent to approximately 20.7% of the current total. The wider expansion also reflects manufacturing activity beyond those projects.

Solar manufacturers face falling module prices associated with excess Chinese capacity, constraints in obtaining critical materials and changing technology. Jain cited solar modules as an example of a sector where ministries need to consider adjustments.

Textiles had attracted Rs 8,117 crore in investment, generated Rs 11,241 crore in sales and created 33,427 jobs by March 2026. Its focus is clothing and fabrics made from manufactured fibres, alongside technical textiles designed for particular uses. Investment remained below aggregate targets, and the shorter implementation period and incomplete reporting limited assessment of production and employment gains.

Drones had used 77.5% of their Rs 120 crore incentive allocation, the highest payout share among the cited sectors. Turnover and investment increased consistently, although employment and export data remained limited.

Food processing attracted investment exceeding Rs 9,207 crore. Larger companies, especially those making ready meals and processed fruit and vegetables, recorded the strongest gains. Smaller businesses producing innovative or organic products had more uneven results. Speciality steel attracted Rs 23,896 crore in investment but still needed progress in employment, exports and domestic content.

What the proposed changes would address

Incentive payments totalled 18.51% of the programme's allocation by March 2026. Payout shares ranged from 77.5% for drones to 55.8% for mobile phones and electronics, 44.4% for pharmaceuticals, 24.9% for food products and 22.6% for telecom. White goods and automobile components were at about 9%.

Long periods needed to build factories and administrative delays help explain the gap between investment and payments. The IT hardware scheme illustrates the early stage of some programmes: only four firms had received incentives by March 2026, despite most approved firms having started operations.

NITI Aayog recommends matching production incentives with measures that help manufacturers find buyers. These include domestic purchasing arrangements, development of export markets and strategic government purchases of products made in India.

Smaller suppliers also need attention. The assessment describes their gains as largely indirect, flowing through orders, technology and market access from larger manufacturers. It lacks a consolidated count of suppliers benefiting across sectors or a systematic measure of how many small businesses grew into larger enterprise categories.

Anil Bhardwaj, secretary general of the Federation of Indian Micro and Small & Medium Enterprises, called for policy to reward business growth.

India needs an industrial policy that rewards enterprises not merely for remaining small, but for becoming larger, more productive and internationally competitive,

Bhardwaj proposed incentives for supplier development, technology absorption and expansion of enterprises. Jain said schemes needing changes would be reviewed with the responsible ministries; no timetable for those decisions was announced.

Key Points

• PLI investment reached 76% of target and production 64% by March 2026, while employment reached 28%.
• Nearly 70% of assessed players and indicators were broadly on track, with substantial differences between sectors.
• Electronics generated about half of recorded production, while white goods increased domestic value addition from 20% to 55%.
• Automobile investment exceeded its target, but employment remained below half of its goal.
• Battery capacity reached 1.4 gigawatt hours against a main target of 50, with commercial production yet to begin.
• NITI Aayog recommends stronger domestic supply networks, support for demand and changes tailored to individual industries.