From Yahoo Finance: 2025-03-21 00:33:00

Indian Prime Minister Narendra Modi’s $23 billion program to boost domestic manufacturing will not be extended after failing to meet targets. Despite 750 firms signing up, only 37% of the goal was achieved by October 2024. Modi’s office did not comment, and alternatives are being considered. Manufacturing’s share of the economy has also decreased.

The Production-Linked Initiative scheme aimed to increase manufacturing to 25% of the economy by 2025. However, firms struggled to kickstart production, and India was slow to pay out subsidies. Only $1.73 billion of the allocated funds were issued as incentives, falling short of expectations. The program’s impact on manufacturing has been minimal, with some sectors seeing explosive growth while others faced challenges.

India’s plan to let the manufacturing program lapse comes as a blow to efforts to attract foreign investment and reduce reliance on China. The country’s manufacturing success in pharmaceuticals and mobile-phone production has not been replicated in other sectors like steel, textiles, and solar panels. Competition from cheaper rivals like China poses a significant challenge.

The solar industry, a key sector under the program, is facing difficulties meeting production targets. Eight of the 12 companies signed up are unlikely to meet their goals, including units of Reliance, Adani Group, and JSW. The renewables ministry has requested an extension, but the commerce ministry has refused, citing concerns about unfair benefits for non-performers.

Read more: Exclusive-India’s $23 billion plan to rival China factories to lapse after it disappoints