PLI schemes to boost food and electronics exports: Industry leaders

The Union Cabinet gave in-principle approval for fund allocation worth ~22,138 crore for food products, electronics and technology products, and white goods
The production-linked incentive (PLI) schemes for food production, electronics, and white goods were welcomed by industry leaders. 

The government’s support will boost India’s local production capabilities and export, they said. 

On Wednesday, the Union Cabinet gave in-principle approval for fund allocation worth Rs 22,138 crore for the three sectors — food products, electronics and technology products, and white goods. While, the specifics of the PLI schemes are yet to be announced, it is expected to be notified within 45 days. 

The Ministry of Electronics and Information Technology, Ministry of Food Processing Industries, and Department for Promotion of Industry and Internal Trade have been tasked with formulating and overseeing the schemes. 

According to Sanjiv Puri, chairman and managing director of ITC, being outcome based the PLI scheme in food production can drive investment that will add significant value to agriculture. It has the potential to “trigger a virtuous cycle of consumption-investment-employment, raising farm income and livelihood”, he said. 

“It promises to power competitive growth of the processed food industry, taking further the opportunities arising from the recent agricultural reforms. A competitive value chain can also boost exports of value-added products, positioning India on the food map of the world,” said Puri. 

Fresh fruits and vegetables, honey, organic eggs, and poultry and marine products are the areas on which the scheme will focus. Further, ready-to-cook and/or eat (RTC/RTE) products are expected to be the key focus areas. 

According to Suresh Narayanan, CMD, Nestle India and chairman of CII’s national council on food processing industries, the decision to introduce PLI scheme for RTC/RTE segment “will fast track the development of exports by this segment towards achieving a $ 2 billion target by 2026. This will also provide timely impetus for encouraging domestic production, generating valuable employment and value addition”, he said.

Piruz Khambatta, CMD, Rasna and chairman of CII taskforce, agrees with the schemes’ potential to boost exports. He called for extension of support to other areas in the sector to further improve prospects. 

The government has also allocated Rs 5,000 crore and Rs 6,238 crore for electronics and white goods (for LED TVs and air conditioners), respectively. 

According to sources, the government is planning to keep a watch on newer categories like security cameras, solid state drive and printed circuit boards (used in desktops, smart TVs, notebooks and smartphones). 

“These are mostly futuristic products that are expected to be used heavily in decades to come. Moreover, the government is not depending on import barriers. Rather, boosting India’s production capabilities in the advanced technology space will be the focus,” said Nitin Kunkolienkar, president of the Manufacturers’ Association of Information Technology (MAIT). 

According to him, an incentive scheme, in the lines of PLI for handsets, will surely enhance local production and export capabilities.

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