Budget to Boost Indian Capital Goods Manufacturing
- The Indian government is considering incentive packages totaling up to ₹23,000 crore (approximately $2.76 billion USD as of January 8, 2026) to be included in the upcoming Union...
- Production-Linked Incentive schemes are designed to encourage domestic production by offering financial incentives to companies based on incremental sales of goods manufactured in India.
- Example: In November 2022, the government approved a ₹19,744 crore PLI scheme for ACC battery storage, intending to establish 50 GWh of storage capacity by 2030.
India’s Proposed ₹23,000 Crore Incentive packages
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The Indian government is considering incentive packages totaling up to ₹23,000 crore (approximately $2.76 billion USD as of January 8, 2026) to be included in the upcoming Union Budget, aimed at boosting domestic manufacturing and attracting investment in key sectors. These packages build upon existing production-linked incentive (PLI) schemes and target areas like textiles, pharmaceuticals, and advanced chemistry cell (ACC) battery storage.
Production-Linked Incentive (PLI) Schemes
Production-Linked Incentive schemes are designed to encourage domestic production by offering financial incentives to companies based on incremental sales of goods manufactured in India. the initial PLI schemes, launched in 2020, covered sectors like pharmaceuticals, food processing, and electronics.
Example: In November 2022, the government approved a ₹19,744 crore PLI scheme for ACC battery storage, intending to establish 50 GWh of storage capacity by 2030. press Data Bureau
Textile Sector Incentives
The textile sector is expected to receive a significant portion of the new incentives, potentially around ₹10,683 crore.This aims to enhance the competitiveness of Indian textile manufacturers and promote exports. The incentives will likely focus on man-made fiber production and technical textiles.
Detail: The Ministry of Textiles has been advocating for increased support to the sector, citing its potential for job creation and economic growth.Ministry of Textiles
Pharmaceutical Sector Expansion
The government plans to allocate approximately ₹3,000 crore to further incentivize pharmaceutical production, particularly for active pharmaceutical ingredients (APIs). This is part of an ongoing effort to reduce India’s reliance on imports of key pharmaceutical ingredients, a goal highlighted during the COVID-19 pandemic.
Evidence: The Department of Pharmaceuticals launched a PLI scheme for APIs in 2020, with a financial outlay of ₹6,940 crore. Department of Pharmaceuticals
advanced chemistry Cell (ACC) Battery Storage
Approximately ₹9,000 crore is earmarked for ACC battery storage, building on the existing PLI scheme. This investment aims to accelerate the development of a domestic battery manufacturing ecosystem, crucial for the growth of electric vehicles and renewable energy storage.
Detail: The Ministry of Heavy Industries is overseeing the implementation of the ACC battery PLI scheme. Ministry of Heavy Industries
Budget Timeline and Implementation
The Union Budget for 2024-25 is expected to be presented to Parliament in February 2024. Following approval, the specific details of the incentive packages will be announced by the relevant ministries. Implementation will likely involve competitive bidding processes and performance-based disbursement of incentives.
Latest Status (as of january 8, 2026): As of this date, the initial PLI schemes are ongoing, with disbursements being made to eligible companies. There have been no official announcements regarding the specific details of the additional ₹23,000 crore in incentives beyond initial reports in late 2023. Livemint