Figure 1: Automated electronics manufacturing assembly line in a domestic factory. [AI Generated]
What changed
The Ministry of Electronics and Information Technology (MeitY) has extended the tenure of the flagship Production Linked Incentive (PLI) Scheme for Large Scale Electronics Manufacturing (LSEM) by one year, running through Financial Year (FY) 2025–26 (MeitY PLI Portal). The scheme offers direct financial incentives of 4% to 6% (and 3% to 5% for specified components in later rounds) on net incremental sales of goods manufactured in India over the base year of FY 2019-20 (MeitY PLI Portal).
Who this affects
This policy update primarily impacts large-scale manufacturing entities and commercial investors:
Global mobile manufacturers: Large global firms targeting high-volume mobile phone production in India ([MeitY PLI Portal](https://www.meity.gov.in/esdm/pli)). Domestic mobile manufacturers: Indian electronic manufacturers looking to scale up production and establish domestic brands (MeitY PLI Portal). Component manufacturers: Business units producing specified electronic components (including Printed Circuit Boards (PCBs), discrete semiconductors, sensors, and Assembly, Testing, Marking, and Packaging (ATMP) packaging units) ([MeitY PLI Portal](https://www.meity.gov.in/esdm/pli)). Industrial investors: Domestic and foreign investors seeking capital-aligned partnerships under the Make in India initiative (MeitY PLI Portal).
Unlike standard Micro, Small and Medium Enterprises (MSMEs) skilling or credit aggregator schemes, the LSEM PLI scheme targets high-investment, high-volume production facilities capable of meeting multi-crore investment and production thresholds.
The details
To qualify for incentive disbursements, approved manufacturers must fulfill specific cumulative investment and incremental sales targets over the base year of FY 2019-20 (MeitY PLI Portal).
Figure 2: Update on the PLI scheme for large scale electronics manufacturing funding, eligibility, and process milestone roadmap. [AI Generated]
Scheme accomplishments (as of February 2026)
According to the Press Information Bureau (PIB), the LSEM PLI initiative has substantially exceeded its initial benchmarks: Cumulative investment: Reached ₹17,519 crore, representing 250% of the initial target of ₹7,000 crore. Cumulative production: Achieved ₹11,01,813 crore against the baseline target of ₹8,12,550 crore. Employment generation: Created over 1.85 lakh direct industrial jobs. Mobile sector growth: Domestically produced mobile phones surged to ₹5.45 lakh crore in FY 2024-25, compared to just ₹18,000 crore in FY 2014-15.
Eligible target segments and price floors
MeitY distributes incentives across two main categories:
- Mobile phones: MeitY restricts this segment to mobile phones with an invoice value of ₹15,000 and above for foreign companies (MeitY PLI Portal).
- Specified electronic components: Surface Mount Technology (SMT) components, discrete semiconductors (transistors, diodes, thyristors), passive components (resistors, capacitors), PCBs, System in Package (SIP), and ATMP units (MeitY PLI Portal).
What to do about it
If you are an eligible electronics manufacturing enterprise or prospective investor:
- Verify price floors: Confirm that your mobile manufacturing plans align with the ₹15,000 invoice value threshold for premium incentives (MeitY PLI Portal).
- Submit registration: Prepare and submit your financial layout on the official MeitY Electronic System Design and Manufacturing (ESDM) application portal.
- Monitor incremental performance: Ensure your capital expenditure (plant, machinery, and equipment) matches the cumulative investment plan required for your specific category.
What is still unclear
While LSEM PLI has driven historic exports, MeitY has left several details open to operational adjustment: Specific compliance timelines for meeting target thresholds in the extended year of FY 2025–26 (PIB). Standardizing custom clearances and domestic value-addition audits for advanced component packaging (ATMP) units (MeitY PLI Portal). Audit guidelines:* MeitY has not yet released the exact Project Management Agency (PMA) guidelines for calculating net sales deductions for sub-assembly components, which are overseen by the Industrial Finance Corporation of India (IFCI) Ltd.