New news from India

As the flagship project of the Narendra Modi government, the Production Linked Incentive Scheme (PLI) is touted as ultimately helping India become a powerful manufacturing machine and a reliable alternative to China. However, experts suggest that this may not be enough and more work needs to be done.
A report from Credit Suisse states that the plan is actually a hodgepodge, as many plans seem very vague (such as food processing, pharmaceuticals, and textiles) and incentivize routine business activities.
The PLI plan envisions a cumulative investment of 21 billion US dollars. The government launched the PLI program in 2021, and according to CRISIL estimates, about a quarter of current capital expenditures are related to it. Credit Suisse stated in its report that capital expenditures are a key monitoring indicator, with batteries, automobiles, and steel accounting for 48% of total capital expenditures.
The impact of capital expenditures on specific industries and companies is low, for example, compared to typical industry capital expenditures, automotive plans may only drive 8-10% incremental capital expenditures.
Lack of international interest?
One of the current shortcomings of this plan is that the participation of major global enterprises has always been average. Except for electronic products (mobile phones and IT hardware), other plans have not yet seen large-scale participation from global giants.
Taking battery PLI as an example, it has not yet seen any major global participants participate, while solar PLI has only shown interest from First Solar. So far, there has been no involvement of industry giants in the semiconductor manufacturing industry's plans.
Credit Suisse stated in its report, "The IT hardware program has received strong participation from industry giants, but industry feedback suggests that the level of incentive measures is not attractive considering the incremental value-added requirements in the following years
Several companies have ventured into multiple fields without the necessary experience. It is worrying that the report points out that many plans involve participants with relatively small balance sheets.
Bloomberg recently reported that billionaire Anil Agarwal has been struggling to find financial support for a semiconductor factory in India, with some investors expressing concerns about the group's limited experience in the industry.
Some plans are designed to accommodate as many players as possible (often over 50 people) rather than just a few champions. The industry also complains about low incentives, high investment requirements, and high sales profits.
Credit Suisse believes that India's GDP has a potential growth of 0.8% due to the promotion of manufacturing in various sectors.
In addition, at the overall level, PLI's incremental revenue plan will increase from $41 billion in fiscal year 23 to $69 billion in fiscal year 25, with a compound annual growth rate of 19%.
More work needs to be done in the manufacturing industry
She said, "India needs to work harder to promote manufacturing activities that are synchronized with the world