Auto, telecom PLI schemes show progress; ACC battery capacity creation remains at early stage: Niti Report

India’s Production Linked Incentive (PLI) schemes for automobiles and auto components, telecom equipment and advanced chemistry cell (ACC) batteries have recorded varying outcomes, with strong investment and manufacturing progress in automobiles and telecom, while battery capacity creation remains at an early stage, according to Niti Aayog's Impact Assessment of PLI Schemes report.

The assessment found that the automobile PLI scheme has attracted investments above its projected target and supported an increase in electric vehicle production. The telecom scheme has strengthened domestic manufacturing capabilities and supported growth in investment, production, exports and employment. In contrast, the ACC battery scheme has developed only a fraction of its targeted manufacturing capacity, with commercial production yet to commence.

Auto PLI: Investment crosses target, EV production increases

The PLI scheme for automobiles and auto components, with an outlay of ₹25,938 crore, attracted cumulative investments of ₹44,326 crore by March 2026, exceeding its projected investment target of ₹42,500 crore.

The report said the scheme is helping India build manufacturing capacity in advanced automotive technologies. Production of electric vehicles has increased across two-wheelers, three-wheelers, passenger vehicles and buses, supported by greater localisation and domestic value addition certification.

The number of incentivised vehicle units rose from 76,838 in FY24 to 12,84,650 in FY25. The total number of incentivised units across the two years stood at 13,61,488.

However, incremental sales under the scheme stood at ₹52,414 crore against the five-year projected target of ₹2,31,500 crore. Employment generation was 67,820 against the target of 1,48,147.

Incentives worth ₹2,386.36 crore had been disbursed under the scheme by March 2026.

The assessment noted that production increased significantly over the two years for which sales data was available, although production values moderated in FY26 based on the data available. It also cautioned that the cumulative nature of the data made it difficult to draw definitive conclusions about the scheme’s precise contribution to overall industry performance.

The report said employment remained below the projected target, while export outcomes could not be comprehensively assessed due to the absence of relevant data.

Telecom PLI supports manufacturing, exports and technology capabilities

The Telecom and Networking Products PLI scheme, with an outlay of ₹12,195 crore, has supported growth in production, investment, exports and employment across large domestic firms, global companies and MSMEs, the assessment said.

Cumulative investment under the scheme stood at ₹5,278 crore, production at ₹1,10,016 crore and employment at 33,610 by March 2026.

The report noted that sales and exports generally increased following a temporary slowdown in 2023 and a strong recovery in 2024–25. Employment broadly followed the production cycle, while investment remained strong despite some recent moderation.

Between FY21 and FY25, India’s telecom exports increased at an average annual growth rate of 1.5%, while imports declined at an average annual rate of 18.5%, according to the assessment.

The scheme has also supported the development of indigenous 4G technology and strengthened domestic manufacturing capabilities for 5G telecom equipment. It provides an additional 1% incentive for products designed, developed and manufactured in India to promote design-led manufacturing.

The report, however, identified continued dependence on imported high-value components as a key challenge. It said domestic manufacturing remained substantially concentrated in final assembly, with deeper domestic value addition and stronger component manufacturing capabilities needed to sustain the scheme’s long-term impact.

ACC battery PLI: 1.4 GWh capacity developed against 50 GWh target

The ACC battery PLI scheme, with an outlay of ₹18,100 crore, aims to establish 50 GWh of domestic advanced chemistry cell manufacturing capacity, along with an additional 5 GWh for niche technologies.

The report said around 1.4 GWh of capacity had been developed against the 50 GWh target. Commercial production had not commenced and no incentive disbursement had been reported at the time of the assessment. Most beneficiary firms remained engaged in infrastructure development and capacity creation.

The assessment attributed the slow progress to the capital-intensive and technologically complex nature of the sector, limited domestic capabilities in advanced battery technology and continued dependence on foreign expertise and technology transfers.

It also highlighted the absence of a developed upstream ecosystem for critical components such as cathodes and anodes, as well as key minerals including lithium and cobalt.

Under the scheme, beneficiary firms are required to achieve minimum domestic value addition of 25% by the end of the second year and 60% by the end of the fifth year. The report said these requirements appeared misaligned with India’s current industrial base and had contributed to delays in capacity creation.

Other constraints identified included dependence on imported machinery, project execution delays and shortages of skilled manpower. Slower-than-expected growth in electric vehicle demand had also affected the pace of investment.

The report noted that the targeted capacity is expected to be achieved at a later date, while emphasising that the scheme’s progress remains constrained by structural and implementation challenges.