PLI (Production Linked Incentive)
Cash incentive of 1–20% on incremental manufacturing sales above a baseline year. Fourteen active schemes from drones to food processing. Incentives are paid by the government annually.
PLI (Production Linked Incentive) is a government programme that pays manufacturing companies a cash incentive as a percentage of their incremental sales above a defined baseline year. The scheme is designed to encourage domestic manufacturing by rewarding production growth, not just existing output.
Who it applies to
- Manufacturing companies in active commercial production in one of the 14 eligible sectors
- Must have an approved PLI application from the relevant ministry with a committed investment plan
- Services companies, pre-revenue startups, and software-only businesses are not eligible
- No DPIIT recognition required — PLI is independent of the Startup India programme
The 14 sectors include mobile phones and electronics, pharmaceuticals, medical devices, food processing, drones, IT hardware, textiles, specialty steel, ACC batteries, and solar PV modules.
What you get
- A cash incentive of 1–20% (sector-dependent) on sales above the baseline year
- Incentives paid annually, typically with a one-year lag after verified sales
- Scheme runs for 4–6 years depending on the sector
Incentive rates vary significantly: drones offer 10–20%, pharmaceuticals (API) 10–20%, food processing 4–10%, IT hardware 1–4%.
What most founders miss
The incentive is on incremental sales — the growth above the baseline — not on total revenue. A company that understands this can use it strategically: timing entry into a new product line to establish a low or zero baseline, then scaling rapidly.
There is no single PLI application portal. Each scheme is run by the ministry responsible for that sector. Applying for the food processing PLI and the drones PLI require two entirely separate applications to two different ministries.
Investment thresholds vary enormously: ₹5 crore for IT hardware, ₹10 crore for food processing MSME track, and ₹1,000+ crore for semiconductors. Most founders only look at the headline number and assume PLI is inaccessible — check your specific sector before ruling it out.
See also
- PLI scheme eligibility — which of the 14 applies to your startup — full article with the sector comparison table
- Udyam Registration — MSME status helps with the PLI MSME track in food processing
- Government grants for Indian startups
Find government schemes your startup qualifies for — free in 3 minutes.
Check my eligibility →