A recent Niti Aayog assessment of India's Production Linked Incentive (PLI) schemes indicates a mixed bag of results across key sectors. While the automobile and telecom equipment manufacturing initiatives have shown strong progress and attracted substantial investments, the advanced chemistry cell (ACC) battery manufacturing scheme is significantly lagging its targets.
Auto PLI Exceeds Investment, Boosts EV Production
The PLI scheme for automobiles and auto components, backed by an outlay of ₹25,938 crore, successfully attracted cumulative investments of ₹44,326 crore by March 2026. This figure surpasses its projected investment target of ₹42,500 crore. The report highlights the scheme's role in building India's advanced automotive technology manufacturing capabilities, particularly in electric vehicles (EVs).
Production of incentivized EV units saw a significant surge, rising from 76,838 in FY24 to 12,84,650 in FY25, totaling 13,61,488 units over two years. This growth was supported by increased localization and domestic value addition. However, the scheme's incremental sales (₹52,414 crore) and employment generation (67,820 jobs) remained below their respective five-year targets of ₹2,31,500 crore and 1,48,147 jobs by March 2026.
Telecom PLI Strengthens Domestic Manufacturing
India's Telecom and Networking Products PLI scheme, with an outlay of ₹12,195 crore, has fostered growth in production, investment, exports, and employment. By March 2026, cumulative investment reached ₹5,278 crore, production stood at ₹1,10,016 crore, and employment touched 33,610 jobs.
The assessment noted that sales and exports generally increased, with India's telecom exports growing at an average annual rate of 1.5% between FY21 and FY25, while imports declined by 18.5%. The scheme has also been instrumental in supporting the development of indigenous 4G technology and strengthening domestic manufacturing capabilities for 5G telecom equipment. Despite these successes, the report identified a continued dependence on imported high-value components as a key challenge, emphasizing the need for deeper domestic value addition beyond final assembly.
ACC Battery PLI Faces Significant Delays
In stark contrast to the auto and telecom sectors, the ACC battery PLI scheme, with an outlay of ₹18,100 crore, has made limited progress. Aiming to establish 50 GWh of domestic advanced chemistry cell manufacturing capacity (plus 5 GWh for niche technologies), only about 1.4 GWh of capacity has been developed by March 2026. Commercial production under the scheme had not yet commenced, and no incentives had been disbursed at the time of the assessment.
The Niti Aayog report attributes this slow pace to several factors, including the capital-intensive and technologically complex nature of the sector, limited domestic capabilities in advanced battery technology, and reliance on foreign expertise. Furthermore, the absence of a developed upstream ecosystem for critical components like cathodes, anodes, and key minerals (lithium, cobalt) poses a significant hurdle. The scheme's domestic value addition requirements (25% by year two, 60% by year five) were deemed misaligned with India's current industrial base, contributing to delays. Other constraints include dependence on imported machinery, project execution delays, skilled manpower shortages, and slower-than-expected growth in electric vehicle demand impacting investment pace.
"The targeted capacity for ACC batteries is expected to be achieved at a later date, while emphasising that the scheme’s progress remains constrained by structural and implementation challenges," the Niti Aayog report concluded.