The Union Budget 2025-26 has delivered a significant push to India’s manufacturing sector by dramatically increasing allocations for the Production-Linked Incentive (PLI) schemes. The funding for various PLI initiatives has surged by over 108%, highlighting the government’s commitment to enhancing self-reliance and positioning India as a global manufacturing powerhouse.
The budgetary outlay for PLI schemes in FY26 (Budget Estimates – BE) has been raised to Rs 19,482.58 crore from Rs 9,360.36 crore in FY25 (Revised Estimates – RE). This increase reflects the government’s intensified focus on reducing import dependence, attracting foreign investments, and bolstering its flagship Atmanirbhar Bharat initiative.
Among the sectors witnessing the most significant budgetary enhancements, PLI schemes for textiles, battery cell and storage technology, and automobile manufacturing saw substantial hikes.
- Textiles: The allocation for the textile sector skyrocketed 25 times to Rs 1,148 crore in FY26 (BE), compared to a mere Rs 45 crore in FY25 (RE). Notably, the actual expenditure for FY24 in this sector was just Rs 4 crore.
- Battery Cells and Storage: Funding in this sector saw a sharp increase from Rs 15.4 crore in FY25 to Rs 156 crore in FY26, demonstrating the government’s commitment to advancing energy storage solutions.
- Automobile Manufacturing: The PLI outlay for this sector rose substantially from Rs 346.87 crore in FY25 to Rs 2,819 crore in FY26, marking a strong focus on electric vehicles and sustainable mobility solutions.
In her budget speech, Union Finance Minister Nirmala Sitharaman announced the launch of a National Manufacturing Mission, which aims to enhance domestic value addition. This mission will play a pivotal role in strengthening India’s manufacturing ecosystem for solar photovoltaic (PV) cells, electric vehicle (EV) batteries, motors, controllers, electrolyzers, wind turbines, high-voltage transmission equipment, and grid-scale batteries
The PLI scheme for electronics manufacturing and IT hardware, the largest in terms of allocation, has been granted Rs 9,000 crore in FY26 (BE), up from Rs 5,777 crore in FY25 (RE)—a 56% increase. This move is expected to further stimulate domestic production and attract major global players in the electronics and semiconductor industries.
Significant Growth in Other Sectors,Specialty Steel: This sector witnessed a six-fold increase in PLI allocation, with funding rising from Rs 55 crore in FY25 (RE) to Rs 305 crore in FY26 (BE).
Pharmaceuticals: The pharmaceutical industry saw a 14% increase in budgetary support, with allocations moving from Rs 2,150.5 crore in FY25 to Rs 2,444.9 crore in FY26.
Despite a focused mention in the Budget speech on promoting toys and footwear manufacturing, these two sectors did not receive any specific PLI budgetary allocation for FY26. This omission has raised concerns among industry stakeholders who were anticipating incentives to boost domestic production in these categories.
The PLI schemes, initially introduced in 2021 with an outlay of Rs 1.97 lakh crore across 14 sectors, were designed to stimulate production, fuel economic growth, and create employment opportunities. The sharp increase in funding underlines the government’s strategic vision to enhance India’s manufacturing capabilities, reduce dependency on imports, and attract investments from global players.
With the Union Budget 2025-26 reinforcing its commitment to manufacturing-led growth, industry experts believe that the increased allocations will accelerate the transformation of India into a global manufacturing hub, driving innovation, economic expansion, and employment generation in the years ahead.
