The Union Budget 2026-27 has earmarked Rs 15,541 crore for Production-Linked Incentive (PLI) schemes across 14 key sectors. However, the overall allocation for PLI schemes saw a marginal dip compared to the revised estimates of Rs 16,072 crore for 2025-26.
The biggest winner in the latest budget is the PLI scheme for automobiles and auto components, which sees its allocation jump nearly threefold to Rs 5,940 crore in 2026-27, up from Rs 2,091 crore in the current year’s revised estimates. The surge underscores the government’s ambition to position India as a global manufacturing hub for advanced automotive technologies.
Large-scale electronics and IT hardware, another cornerstone of the PLI framework, continues to command a significant share of the pie, though its allocation has been trimmed to Rs 1,527 crore from Rs 7,000 crore in revised estimates just as the original six-year tenure of the PLI approaches its March 2026 deadline. The government is reportedly weighing a fresh extension or a successor “PLI 2.0” to avoid risking the gains.
Pharmaceuticals remains one of the most consistently funded segments, with schemes covering bulk drug parks, critical key starting materials, and medical devices pegged at Rs 2,500 crore—nearly unchanged from last year. The steady allocation comes as India looks to cement its position as the world’s third-largest pharmaceutical market and a reliable supplier of generic drugs.
Telecom and networking products manufacturing is set to see funding rise to Rs 1,950 crore from Rs 1,944 crore, while the white goods segment covering ACs and LED lights sees its allocation more than triple to Rs 1,004 crore. Both schemes are aimed at deepening India’s domestic supply chain and reducing reliance on Chinese imports.
Smaller but strategically important sectors like specialty steel, drones, textiles, and advanced chemistry cell batteries have also seen their allocations expanded, reflecting a broader government strategy to diversify the manufacturing base.
There was no budgetary allocation for a PLI scheme for toys in Budget 2026-27.
Read Forbes India's complete Budget 2026-27 coverage here
First Published: Feb 01, 2026, 17:24
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