By Sarita Chagant Singh and Shivang Acharia
According to four government officials, the government of Indian Prime Minister Narendra Modi has decided to allow a $23 billion program to encourage domestic production, just four years after its efforts to remove companies from China.
Two officials said the plan would not be expanded from 14 test sectors and the date of production would not be extended in addition to the demands of some companies participating.
Public records show that about 750 companies, including Foxcons and Indian-e-Rilass industries, have registered for initiatives plans related to production.
If they achieved individuals and their deadlines, they would have been promised that they had been paid cash. Hope was to raise the economic stake to 25 percent by 2025.
Instead, many of the companies that participated in the program have failed to start production, while others who have achieved production objectives have considered India slowly to provide aid, according to government documents and letters seen by Reuters.
According to an undiscovery analysis collected by the Ministry of Commerce, in October 2024, the companies participating in the program worth $ 151.93 billion produced goods under the program, 37% of the goal set by Dahli, according to an analysis of the program collected. The document says India has excluded only $1.73 billion from incentives – or less than 8 percent of the money allocated.
The government’s decision not to extend the plans and features on the delay in payments is first reported by Reuters.
Modi’s office and the Ministry of Commerce, which supervises the program, did not respond to the requests to comment. Since the plan was established, the economic stake in the economy has fallen from 15.4 percent to 14.3 percent.
Foxcon, which currently employs thousands of contract workers in India, has not returned its requests to the statement.
Two government officials told Reuters that the end of the program does not mean that Dahli had given up his own production aspirations and planned alternatives.
Last year, the government defended the effects of the program, especially in the field of pharmaceutical and mobile phone production, which have seen the growth of explosions. About 94 percent of the $620 million spent between April and October 2024 have been directed at the two sectors.
In some cases, some food companies that asked for help did not go out due to reasons such as “investment levels” and companies “No to the lowest growth” according to the analysis. The document did not provide features, although it found that production in the sector had passed its goals. Reuters failed to determine the analysis mentioned.
However, Dahli has already acknowledged the problems and agreed to extend some deadlines and increase the fragmentation of money after the complaints of the Pli subscribers. One Indian official, who was not named, spoke to discuss confidential issues, said the excesses of red and bureaucratic strip had continued to resolve the impact of the plan.
Another official says as an alternative, India is considering supporting some sectors with part of the investment money that has been made to install factories, which allows companies to recover the costs faster than they have to wait for production and sales.
Bisajit Dar for the Municipal Council for Social Development, based in Dahli, which said the Moodi government needs more to attract foreign investment, he said it may have lost the moment.
He said the incentive program “maybe the last opportunity to revive our production sector. “If this type of mega-chima fails, do you expect anything to succeed?”
The suspension of production comes as India is trying to free the trade war, which has criticized Dahli’s protection policies.
“Trump’s threats to taxes on countries such as India, which have a trade surplus with the United States, means that the export sector is increasing,” Dahar said. “There was a amount of tax protection … and all the things that are going to be cut.
beats and lenses
The program was introduced to India at an appropriate time: China, which had been the world’s land for decades, was struggling to maintain production between Beijing’s zero-COVID-10.
The United States also seeks to reduce its economic dependence on a more stress, prompting many multi-ethnic companies to have a “cine and one” policy to diversify production lines.
Because the number of great young people, reducing its costs and a relatively friendly government is seen to the West, India is likely to benefit.
India has become the world’s leading world leader in recent years.
Government data show that the country produced $49 billion worth of mobile phones in 2023-24, an increase of 63 percent compared to 2020-2 Industrial leaders such as Apple are now making the latest and most complex phones in India, after starting with low models.
Similarly, pharmaceutical exports in 2023-2024 doubled to $27.85 billion in 2023-2
However, the success was not repeated in other sectors, including steel, fabrics and the production of the solar panel. India faces fierce competition in many of these areas.
In the solar industry, for example, eight of the 12 companies named in PLI are unlikely to achieve their goals, according to a December 2024 analysis of the new Energy Department prepared by Reuters. The eight companies included the units of the Rilass, the Adani group and the Indian Society JSW.
The analysis showed that the Rilass Foundation provides only 50 percent of the production purposes set for the end of the fiscal year 2027, when the Pli plan expires. He also said the Adani businessman did not ask for the equipment necessary for the construction of panels and JSW “nown’t done anything yet.
JSW refused to comment, while Adani did not answer questions.
In a January letter to the Energy Ministry, the Commerce Ministry said Reuters had seen it not approving its equal request to extend the plan since
The new Energy Ministry said in response to Reuters’ questions that it was committed to “justice and accountability”, and “assurance that only those who achieve their goals will be rewarded.
In the steel sector, investment and production are also delayed. According to the analysis of the program, fourteen out of 58 projects approved for Plis have been withdrawn or removed due to lack of progress.
($1 = 86.4425 Indian rupees)
(Report of Shivang Acharia and Sarrita Chagant Singh; Editing by Aftab Ahmed and Catherrina Ang)
