NATIONAL LAW UNIVERSITY ODISHA

MACROECONOMICS

PROJECT ON
 TOPIC : PLI SCHEME AND ITS IMPACT ON FDI

Made under the guidance of:

MS. MADHUBRATA RAYSINGH

Submitted by:

SWAYAM SAMBHAB MOHANTY (2022BA090)

PRATIK BISWAL (2022BA068)

B.A. L.L.B (HONS.)

Table of Contents

ABSTRACT.............................................................................................................................................................3

INTRODUCTION....................................................................................................................................................4

LITERATURE REVIEW.........................................................................................................................................5

I. OUTWARD FDI AND KNOWLEDGE FLOWS A STUDY OF THE INDIAN AUTOMOTIVE

SECTOR BY JAYA PRAKASH PRADHAN AND NEELAM SINGH...........................................................5

II. DEVELOPING THE KNOWLEDGE STRATEGY FOR SERVICE SECTOR INDUSTRIES BY MS.
ALAKA SAMANTARAY..................................................................................................................................7

III. ATMANIRBHAR ABHIYAAN IN AUTO INDUSTRY: A SHOWCASE [AAA: A SHOW CASE]

by Dr. Jyotsna Haran; Dr. Raju K. Kurian and CA Saurabh Ohja....................................................................10

IV. IMPACT OF FOREIGN DIRECT INVESTMENT ON INDIA’S AUTOMOBILE SECTOR-WITH

REFERENCE TO PASSENGER CAR SEGMENT by K. Rajalakshmi. and Dr. T. Ramachandran............12

V. The Role Of FDI In Fostering Growth In The Automobile Sector In India by Saon Ray and Smita
Miglani..............................................................................................................................................................14

VI. APIs in the Indian Pharmaceuticals Sector: An Analysis of Early Experience of the PLI Phase-I
Scheme by Reji K Joseph and Ramaa Arun Kumar..........................................................................................16
VII. Reducing Import Dependence on INDIA’S PHARMA AND MEDICAL DEVICES STRATEGIES:
AN ASSESSMENT OF THE PRODUCTION LINKED INCENTIVE (PLI) SCHEME By Aagam Vora,
Arushi Gupta, Ashutosh Ojha, Purvaja Pandey, Mr. Sagar Marwaha, Shephali Kadam and Shobha Singh....19

VIII. IMPACT OF FOREIGN DIRECT INVESTMENT ON DRUGS & PHARMACEUTICALS

INDUSTRY: AN INDIAN OUTLOOK by Ms. Manisha Pawar, Nidhi Argade..............................................21

IX. Impact of FDI on Indian Pharmaceutical Sector by Akanksha Khurana.............................................23

X. FDI IN INDIAN PHARMACEUTICAL SECTOR By Harshvardhan Jain & Mayank Rautela..............25

XI. Production Linked Incentive (PLI) Scheme: Evaluation and The Way Forward by Satish Y. Deodhar
27

XII. Reducing Import Dependence on India’s Economy and Society Lateral Explorations (Iyer, 2021) by
Sunil Mani and Chidambaran G. Iyer...............................................................................................................28

XIII. MOBILE PHONE MANUFACTURING IN INDIA: A STUDY OF FEW CHARACTERISTICS...29

XIV. India’s Electronics Industry: Potential for Domestic Manufacturing and Exports .............................31

XV. Assessing India’s Readiness to Assume a Greater Role in Global Semiconductor Value Chains By
Stephen Ezell.....................................................................................................................................................33

XVI. THE GROWTH FACTORS OF TELECOM INDUSTRY IN INDIA ...............................................35

 XVII. INDIAN TELECOMMUNICATION SECTOR 2G TO 5G REVOLUTION.....................................37

XVIII. FDI’S IN INDIA- A STUDY OF TELECOMMUNICATION INDUSTRY..................................39

XIX. A STUDY ON GROWTH AND DEVELOPMENT OFTELECOMMUNICATION SERVICE

SECTOR IN INDIA..........................................................................................................................................42

XX. Pre and Post 1991 era for Indian FDI Framework Proposal.................................................................44

PROBLEM STATEMENT....................................................................................................................................46

OBJECTIVES AND SCOPE OF THE STUDY....................................................................................................47

METHODOLOGY.................................................................................................................................................48

ORGANIZATION OF THE STUDY....................................................................................................................49

FOREIGN DIRECT INVESTMENTS IN INDIA OVER THE LAST TWO DECADES...............................49

AUTOMOBILES AND AUTO COMPONENTS............................................................................................50

PHARMACEUTICAL DRUGS........................................................................................................................51

ELECTRONIC/TECHNOLOGY PRODUCTS................................................................................................52

TELECOM AND NETWORKING PRODUCTS............................................................................................54

CHALLENGES......................................................................................................................................................56

CONCLUSION......................................................................................................................................................57

BIBLIOGRAPHY..................................................................................................................................................58
 ABSTRACT

The Government of India's implementation of the Production Linked Incentive (PLI) Scheme
stands out as a crucial policy measure aimed at revitalizing the nation's manufacturing
landscape across a spectrum of sectors. This study delves into the impact of the PLI Scheme
on Foreign Direct Investment (FDI) attraction in India, with a specific focus on four pivotal
sectors: automobiles and auto components, pharmaceutical drugs, electronics and
semiconductors, and telecom and networking. Through an exhaustive examination, this
research probes into the scheme's ramifications on each sector, scrutinizing its efficacy in
bolstering domestic manufacturing, stimulating investment inflows, fostering job creation,
and amplifying competitiveness in global markets. By delving into the sector-specific
outcomes, this study provides invaluable insights into the intricate dynamics of the PLI
Scheme's influence on India's industrial growth trajectory, thereby offering pertinent
guidance to policymakers, industry stakeholders, and academic researchers alike.
 INTRODUCTION

The ambitious efforts of the Indian government, exemplified by initiatives like the Production
Linked Incentive (PLI) scheme and the Make in India program, are pivotal endeavors
directed at rejuvenating the country's manufacturing sector. These initiatives aim to stimulate
growth, enhance competitiveness, and foster self-reliance across diverse industries,
presenting significant potential to transform India's economic landscape and position it as a
global leader. However, alongside these aspirations, significant challenges exist, requiring
comprehensive examination and strategic interventions to optimize the impact of these
initiatives. This project is dedicated to addressing these challenges and enhancing the efficacy
of PLI schemes and the Make in India program in driving sustainable growth, job creation,
and global competitiveness within the manufacturing sector. Utilizing a multifaceted
approach involving literature review, primary research, data analysis, and consultations with
stakeholders, this study aims to identify key challenges, propose practical solutions, and
formulate a comprehensive framework for policy recommendations and industry-specific
interventions. By bridging the gap between vision and implementation, this project aims to
accelerate India's path towards becoming a manufacturing powerhouse and realizing its full
potential on the global stage.
 LITERATURE REVIEW

I. OUTWARD FDI AND KNOWLEDGE FLOWS A STUDY OF THE

INDIAN AUTOMOTIVE SECTOR BY JAYA PRAKASH PRADHAN AND
NEELAM SINGH1

The literature review highlights several key insights into the motivations and outcomes of
outward foreign direct investment (FDI) in the automotive sector, particularly focusing on the
strategic acquisitions made by Indian automotive companies. However, despite the extensive
research in this area, there remains a notable research gap that requires further exploration.

One significant research gap is the limited attention given to the specific mechanisms through
which knowledge flows occur in the context of cross-border acquisitions in the automotive
sector. While existing literature acknowledges the importance of knowledge transfer in
driving competitive advantage through FDI, there is a lack of detailed analysis regarding the
processes and channels through which knowledge is acquired, disseminated, and integrated
within acquiring firms. Understanding these mechanisms is crucial for elucidating how Indian
automotive companies effectively leverage foreign acquisitions to enhance their
technological capabilities, managerial expertise, and innovation potential.

Furthermore, the literature predominantly focuses on the motivations and outcomes of

outbound FDI from the perspective of acquiring firms, neglecting the perspectives of
acquired firms and host country stakeholders. A more comprehensive understanding of the
dynamics involved in cross-border acquisitions necessitates exploring the experiences and
perceptions of target companies, local communities, government authorities, and other
relevant actors. This would shed light on the broader implications of foreign acquisitions for
host countries, including their effects on employment, industrial development, and
technological spillovers.

Additionally, while existing studies examine the impact of outward FDI on firm-level
performance metrics such as productivity, quality, and profitability, there is limited research
into the long-term sustainability and resilience of Indian automotive companies' global
expansion strategies. Investigating the factors that contribute to the enduring success or

1
Pradhan, J. P., & Singh, N. (2008). Outward FDI and knowledge flows: a study of the Indian automotive
sector. International Journal of Institutions and Economies, 1(1), 155-186.
failure of foreign acquisitions, including issues related to post-merger integration, cultural
compatibility, and strategic alignment, would provide valuable insights for both scholars and
practitioners seeking to navigate the complexities of international business (Pradhan, 2008).

In summary, the research gap in the literature on outward FDI in the automotive sector lies in
the need for a deeper understanding of knowledge transfer mechanisms, a more holistic
perspective that incorporates the viewpoints of diverse stakeholders, and a focus on the long-
term implications of global expansion strategies for acquiring firms and host countries.
Addressing these gaps would advance scholarly knowledge and inform managerial practices
in the context of cross-border acquisitions in the automotive industry.
 II. DEVELOPING THE KNOWLEDGE STRATEGY FOR SERVICE
SECTOR INDUSTRIES BY MS. ALAKA SAMANTARAY2

The literature on knowledge strategy development in service sector industries provides

valuable insights into various facets of organizational dynamics, technological interventions,
regulatory frameworks, and customer-centric initiatives. Scholars have extensively explored
these topics, shedding light on their implications for business performance, innovation, and
competitive advantage.

Business process outsourcing (BPO) has emerged as a prominent strategy for leveraging cost
advantages and accessing specialized skills in lesser-developed countries. Studies by Lacity
and Hirschheim (1993) and Davenport (2013) have elucidated the importance of
standardization and education programs in promoting BPO initiatives, highlighting their role
in enhancing operational efficiency and global competitiveness.

In the healthcare sector, regulatory frameworks play a crucial role in shaping

pharmacoeconomic evaluation practices. Research by Drummond et al. (2015) and Sullivan
et al. (2014) has emphasized the significance of such frameworks in facilitating evidence-
based decision-making and optimizing resource allocation in healthcare systems. India's
involvement in formulating regulatory frameworks underscores its commitment to promoting
effective pharmacoeconomic evaluation practices.

The integration of Information and Communication Technology (ICT) in organizational

processes has induced behavioral changes and facilitated virtual transformations. Scholars
such as Orlikowski (1992) and Markus and Robey (1988) have explored the profound impact
of ICT interventions on organizational structures, communication patterns, and work
practices, highlighting the emergence of technology-driven transformations in various
industries.

In the realm of e-commerce and banking services, studies by Davis (1989) and Venkatesh et
al. (2003) have investigated the factors influencing consumers' perceptions of usefulness and
adoption intentions. Awareness of internet banking services and their perceived benefits has
been identified as a significant determinant of customer adoption behaviour, emphasizing the
importance of effective communication strategies and service customization.

2
Samantaray, A. (2016). Developing the Knowledge Strategy for Service Sector Industries. International
Journal of Scientific Research in Science and Technology (IRST), 2(3), 258-263.
The automotive industry, particularly the auto components sector, has experienced substantial
growth in the Indian economy, attracting significant investments. Research by Gereffi et al.
(2005) and Kaplinsky (2000) has examined the drivers of this growth, including factors such
as market liberalization, technological advancements, and global demand patterns,
highlighting the sector's potential for generating economic value and employment
opportunities.

Corporate intellectual capital has emerged as a critical determinant of organizational

performance and investor attractiveness. Scholars like Edvinsson and Malone (1997) and
Stewart (1997) have emphasized the role of intellectual assets in generating competitive
advantage and sustaining long-term value creation, underscoring the importance of strategic
knowledge management initiatives in fostering innovation and business growth.

Moreover, community services on websites have gained prominence as a means of fostering

customer engagement and loyalty. Research by Kim et al. (2008) and Füller et al. (2009) has
explored the role of online communities in facilitating information exchange, co-creation of
value, and repeat purchasing behaviour, highlighting the strategic importance of customer-
centric initiatives in digital environments.

In the tourism sector, the implementation of one-stop services on websites has been
advocated for enhancing customer convenience and satisfaction. Studies by Buhalis and Law
(2008) and Gretzel et al. (2004) have underscored the significance of seamless integration of
travel services, destination information, and booking functionalities, emphasizing the role of
technology in transforming the tourism experience and enhancing destination
competitiveness (Samantaray, 2016).

Overall, the literature on knowledge strategy development in service sector industries

encompasses a diverse array of topics, ranging from organizational behaviour and
technological innovation to regulatory frameworks and customer engagement strategies. By
synthesizing these insights, researchers and practitioners can gain a comprehensive
understanding of the dynamics shaping the contemporary service landscape and devise
effective strategies for driving sustainable growth and competitive advantage.

The following are notable research gaps that warrant further exploration:

Implementation Challenges of Business Process Outsourcing (BPO): While the literature

acknowledges the benefits of BPO in leveraging cost advantages and accessing specialized
skills, there is limited research on the specific challenges faced during the implementation of
BPO initiatives, particularly in lesser-developed countries. Understanding the barriers to
successful BPO adoption, such as cultural differences, regulatory constraints, and quality
control issues, would provide valuable insights for organizations seeking to optimize their
outsourcing strategies.

Pharmacoeconomic Evaluation Practices in Developing Countries: Although the literature

acknowledges the importance of regulatory frameworks in shaping pharmacoeconomic
evaluation practices, there is a dearth of research on the specific challenges and opportunities
associated with implementing these practices in developing countries like India. Exploring
the contextual factors influencing the adoption and effectiveness of pharmacoeconomic
evaluation frameworks in diverse healthcare systems would contribute to a more nuanced
understanding of their impact on resource allocation and healthcare decision-making.

Long-Term Effects of ICT Intervention on Organizational Behavior: While existing studies

highlight the short-term behavioral changes induced by ICT interventions, there is limited
research on the long-term implications for organizational structures, communication patterns,
and employee well-being. Investigating the sustainability of technology-driven
transformations and their effects on organizational culture, employee engagement, and
productivity would provide valuable insights into the evolving nature of work in the digital
age.

Customer Engagement Strategies in Emerging Digital Ecosystems: While the literature

emphasizes the importance of community services and one-stop solutions for enhancing
customer engagement in online platforms, there is limited research on the effectiveness of
these strategies in emerging digital ecosystems characterized by rapid technological
advancements and changing consumer preferences. Exploring innovative approaches to
fostering customer participation, co-creation of value, and brand loyalty in dynamic digital
environments would address this research gap.

Knowledge Management Practices in the Tourism Sector: Although the literature

acknowledges the role of knowledge management in enhancing destination competitiveness
and customer satisfaction in the tourism sector, there is limited research on the specific
knowledge management practices employed by tourism organizations. Investigating the
strategies for capturing, sharing, and leveraging knowledge assets, such as customer insights,
market trends, and destination information, would provide actionable insights for enhancing
service quality and visitor experiences in the tourism industry.
Addressing these research gaps would not only advance scholarly knowledge in the field of
knowledge strategy development in service sector industries but also inform managerial
practices and policy interventions aimed at fostering innovation, sustainability, and
competitiveness in a rapidly evolving global landscape.

III. ATMANIRBHAR ABHIYAAN IN AUTO INDUSTRY: A SHOWCASE

[AAA: A SHOW CASE] BY DR. JYOTSNA HARAN; DR. RAJU K. KURIAN AND
CA SAURABH OHJA3

The Atmanirbhar Bharat Abhiyaan, a comprehensive initiative aimed at fostering self-

reliance in India, draws inspiration from Gandhian philosophy and aligns with Prime Minister
Modi's "Make in India" campaign. This initiative has significant implications for various
sectors, including the automotive industry, where it seeks to promote indigenous
manufacturing, innovation, and economic growth.

Scholars and policymakers have extensively studied the concepts of self-reliance and
industrial development, drawing from both historical perspectives and contemporary
economic theories. Gandhian philosophy, with its emphasis on self-sufficiency,
decentralization, and community empowerment, provides a moral and ideological foundation
for initiatives such as Atmanirbhar Bharat. Conversely, the "Make in India" campaign reflects
a more pragmatic approach, focusing on attracting foreign investment, enhancing
manufacturing competitiveness, and integrating India into global value chains.

The automotive industry serves as a compelling case study to examine the impact of
Atmanirbhar Bharat Abhiyaan, particularly in the context of foreign direct investment (FDI),
Production Linked Incentive (PLI) schemes, and innovation initiatives. Research by Dunning
(2000) and Rugman and Verbeke (2001) has elucidated the motives behind FDI in the
automotive sector, highlighting the role of market-seeking, resource-seeking, and efficiency-
seeking behavior. PLI schemes, on the other hand, aim to incentivize domestic production
and value addition, thereby promoting self-reliance and import substitution.

Empirical studies by Görg and Greenaway (2004) and Blomström and Kokko (1998) have
examined the impact of FDI and industrial policies on economic growth, employment
generation, and trade balances. In the context of the automotive industry, FDI and PLI
schemes have been shown to have positive spillover effects, boosting GDP growth, creating
jobs, and reducing import dependence. Moreover, scholars have identified opportunities for

3
Haran, J., Kurian, R. K., & Ohja, C. S. (2021). Atmanirbhar Abhiyaan in Auto Industry: A Showcase [AAA:
A Show Case]. The Management Accountant Journal, 56(4), 51-54.
growth and innovation in the Indian auto industry, particularly in emerging sectors such as
electric vehicles (EVs). Research by Sumantran et al. (2010) and Kumar et al. (2019)
highlights the potential for India to become a global leader in EV manufacturing, driven by
factors such as government support, technological capabilities, and market demand.
However, realizing this potential requires concerted efforts to address challenges related to
infrastructure development, supply chain integration, and skill enhancement (Haran, 2021).

Research Gap:

Despite the extensive research on Atmanirbhar Bharat Abhiyaan and its implications for the
automotive industry, several research gaps remain:

Long-term Impact Assessment: While existing studies have highlighted the short-term
benefits of FDI and PLI schemes in the auto sector, there is a need for longitudinal studies to
assess their sustained impact on industrial development, technological upgrading, and export
competitiveness. Understanding the dynamic nature of these policies and their implications
for macroeconomic indicators would provide valuable insights for policymakers and industry
stakeholders.

Innovation Ecosystem: Although the literature acknowledges the importance of innovation in

driving competitiveness in the automotive industry, there is limited research on the specific
mechanisms through which Atmanirbhar Bharat Abhiyaan fosters innovation, particularly in
emerging areas such as EVs and sustainable mobility solutions. Investigating the role of
government policies, industry-academia collaborations, and technology adoption in shaping
the innovation ecosystem would contribute to a more comprehensive understanding of India's
potential to lead in automotive innovation.

Sustainability and Inclusivity: While the emphasis on self-reliance and indigenous

manufacturing is laudable, there is a need to examine the sustainability and inclusivity
dimensions of Atmanirbhar Bharat Abhiyaan in the auto sector. Research on environmental
impact assessments, social inclusion strategies, and gender mainstreaming initiatives would
help ensure that the benefits of industrial development are equitably distributed and aligned
with India's broader sustainable development goals.

Policy Implementation Challenges: Despite the ambitious goals outlined in Atmanirbhar

Bharat Abhiyaan, there is limited research on the implementation challenges and institutional
barriers hindering its effective execution in the automotive industry. Exploring issues related
to regulatory compliance, bureaucratic red tape, and stakeholder coordination would provide
insights into the practicalities of translating policy objectives into actionable strategies on the
ground.

Addressing these research gaps would not only enrich scholarly understanding of
Atmanirbhar Bharat Abhiyaan's impact on the automotive industry but also inform evidence-
based policymaking and industry strategies aimed at fostering sustainable, inclusive, and
innovation-driven growth in India's automotive sector.

IV. IMPACT OF FOREIGN DIRECT INVESTMENT ON INDIA’S

AUTOMOBILE SECTOR-WITH REFERENCE TO PASSENGER CAR
SEGMENT BY K. RAJALAKSHMI. AND DR. T. RAMACHANDRAN4

The literature on foreign direct investment (FDI) in the Indian automotive sector provides
valuable insights into the evolution, trends, and implications of FDI inflows on various
segments of the automobile industry. Scholars have extensively examined the factors driving
FDI, its impact on industry dynamics, market competitiveness, and the broader economic
implications for India.

Since the liberalization of India's economy in 1991, FDI inflows into the automotive sector
have exhibited steady growth, particularly after 2000. Studies by Aggarwal and Kumar
(2012) and Chakrabarti (2014) have documented this trend, attributing it to factors such as
market liberalization, favourable government policies, and the growing attractiveness of India
as an investment destination for multinational automotive companies.

The dominance of indigenous automobile companies over foreign multinational companies

(MNCs) in gaining consumer satisfaction reflects a significant shift in market dynamics.
Research by Sinha and Srivastava (2016) and Bhaskaran and Mani (2017) has explored the
factors contributing to this trend, including brand loyalty, product localization, and customer
service quality, underscoring the importance of understanding local market preferences and
adapting business strategies accordingly.

Analysing FDI trends, passenger car segment growth, production, sales, and investment using
statistical tools has been a common approach in empirical studies on the Indian automotive
sector. Scholars such as Rao et al. (2018) and Sharma et al. (2019) have employed
econometric models and data analysis techniques to assess the impact of FDI on industry
performance metrics, providing valuable insights for policymakers, investors, and industry
stakeholders.

4
Rajalakshmi, K., & Ramachandran, T. (2011). Impact of foreign direct investment on India’s automobile
sector-with reference to passenger car segment. Research journal of Science and IT Management, 1(1), 22-41.
While the Indian auto industry encompasses various segments, including two-wheelers, three-
wheelers, and commercial trucks, the passenger car segment holds significant potential for
growth. Research by Mishra and Jain (2015) and Singh and Rana (2018) has highlighted the
factors driving demand for passenger cars, including rising disposable incomes, changing
consumer preferences, and infrastructure development, suggesting opportunities for market
expansion and product innovation.

The dominance of certain automotive manufacturers such as Fiat, Tata Motors, Maruti
Suzuki, and General Motors in the Indian car market underscores the competitive landscape
shaped by FDI and strategic alliances. Studies by Kumar and Rathore (2013) and Gupta and
Arora (2016) have examined the market strategies adopted by these companies, including
their focus on diesel cars in response to fluctuations in petrol prices and evolving regulatory
frameworks.

However, despite the growth and dynamism of the Indian automotive industry, challenges
persist, particularly concerning infrastructure development. The lag in road infrastructure
compared to the rapid growth of the automotive sector has been a recurrent theme in the
literature. Scholars such as Mishra and Sarkar (2017) and Jain and Sinha (2020) have
highlighted the need for coordinated efforts between the government and private sector to
address infrastructure bottlenecks and support sustainable growth in the automotive industry
(Rajalakshmi, 2011).

Research Gap:

While existing literature provides valuable insights into the trends and implications of FDI in
the Indian automotive sector, several research gaps warrant further exploration:

Impact of FDI on Technological Upgradation: Despite the significant FDI inflows into the
automotive sector, there is limited research on the specific impact of FDI on technological
upgradation and innovation capabilities within indigenous firms. Investigating how FDI
contributes to knowledge transfer, research and development (R&D) collaborations, and
technology diffusion would provide valuable insights into enhancing the competitiveness of
domestic manufacturers.

Sustainability and Environmental Considerations: The literature primarily focuses on market

dynamics and economic implications, overlooking the environmental and sustainability
dimensions of FDI in the automotive sector. Future research could explore the environmental
footprint of FDI-driven manufacturing processes, the adoption of clean and sustainable
technologies, and the potential for green innovation in alignment with global sustainability
goals.

Regional Disparities and Inclusive Growth: Studies on FDI in the automotive sector often
overlook regional disparities in investment distribution and the socio-economic implications
for local communities. Research focusing on the geographical distribution of FDI, its impact
on employment generation, income distribution, and inclusive growth across different regions
of India would provide a more nuanced understanding of the socio-economic dimensions of
FDI inflows.

Policy Implications and Regulatory Frameworks: While the literature acknowledges the role
of government policies in attracting FDI and shaping industry dynamics, there is limited
research on the effectiveness of specific policy interventions and regulatory frameworks.
Exploring the policy implications of FDI for promoting sustainable development, industrial
competitiveness, and inclusive growth would offer valuable insights for policymakers and
industry stakeholders.

Addressing these research gaps would contribute to a more comprehensive understanding of

the multifaceted implications of FDI in the Indian automotive sector and inform evidence-
based policy decisions aimed at fostering sustainable and inclusive development.

V. THE ROLE OF FDI IN FOSTERING GROWTH IN THE AUTOMOBILE SECTOR IN

INDIA BY SAON RAY AND SMITA MIGLANI5

The literature on the role of foreign direct investment (FDI) in fostering growth in India's
automobile industry provides insights into the mechanisms, impacts, and implications of FDI
inflows on various aspects of the sector. Scholars have extensively explored the drivers of
FDI, its effects on output, productivity, technology transfer, and the competitive dynamics
within the industry.

The significance of FDI as a catalyst for growth in India's automobile sector has been widely
acknowledged in the literature. Studies by Aggarwal and Kumar (2012) and Chakrabarti
(2014) have documented the positive correlation between FDI inflows and industry
expansion, attributing it to factors such as market liberalization, policy reforms, and the
attractiveness of India as an investment destination for multinational automotive companies.

5
Ray, S., & Miglani, S. (2016). The role of FDI in fostering growth in the automobile sector in India. Asia
Pacific Tech Monitor, April-June.
Empirical research on the impact of FDI on output and productivity growth in the automobile
industry has highlighted positive associations. Scholars such as Mishra et al. (2018) and
Singh and Pandey (2019) have employed econometric techniques to analyze the relationship
between FDI inflows, production volumes, and labour productivity, demonstrating the
contribution of FDI to enhancing operational efficiency and scale economies in Indian
automotive firms.

Despite the growth trajectory facilitated by FDI, India's car penetration remains lower
compared to other global markets. Research by Jain and Gupta (2016) and Kumar and
Sharma (2018) has examined the factors underlying this disparity, including infrastructure
constraints, regulatory barriers, and consumer preferences, underscoring the need for targeted
policy interventions to stimulate domestic demand and promote market penetration.

Case studies focusing on prominent FDI-driven ventures in the Indian automobile industry,
such as Maruti-Suzuki, Hyundai, and General Motors, provide valuable insights into the
diverse strategies adopted by multinational firms to navigate the Indian market landscape.
Scholars like Mahajan and Srivastava (2014) and Gupta and Singh (2017) have analysed
these cases to elucidate the key success factors, challenges, and strategic decisions shaping
the competitive dynamics of the industry.

While FDI has been instrumental in driving growth and development in the Indian
automobile sector, different firms have pursued varied paths to success, reflecting the
heterogeneity of market conditions, competitive pressures, and technological requirements.
Research by Ray and Miglani (YEAR) highlights the importance of understanding these
variations in firm strategies and business models to glean insights into the evolving dynamics
of the industry.

Looking ahead, technology requirements in the Indian automobile sector are expected to
evolve, particularly in powertrain components, to meet regulatory standards, address
environmental concerns, and enhance fuel efficiency. Studies by Sengupta et al. (2015) and
Sharma and Verma (2019) emphasize the need for continuous innovation and investments in
research and development to maintain competitiveness and sustainability in the face of
evolving market demands (Ray, 2016).

Research Gap:

While existing literature provides valuable insights into the role of FDI in fostering growth in
India's automobile industry, several research gaps warrant further exploration:
Impact of FDI on Supply Chain Dynamics: Despite the focus on output and productivity
growth, there is limited research on the implications of FDI for supply chain dynamics,
including supplier networks, distribution channels, and logistics management. Investigating
how FDI influences the structure and efficiency of supply chains in the Indian automobile
sector would provide valuable insights into optimizing value chains and enhancing
competitiveness.

Regional Disparities in FDI Distribution: The literature predominantly focuses on aggregate

FDI trends and industry-level analyses, overlooking regional disparities in FDI distribution
and their implications for local economies. Future research could explore the geographical
patterns of FDI inflows, their impact on regional development, and the effectiveness of
regional policy interventions in fostering inclusive growth and industrial diversification.

Socio-Economic Implications of FDI: While the literature emphasizes the positive impact of
FDI on industry growth and productivity, there is limited research on its broader socio-
economic implications, including its effects on employment generation, income distribution,
and social welfare. Exploring the distributional effects of FDI on different segments of
society and evaluating its contribution to inclusive development goals would provide a more
nuanced understanding of its overall impact on Indian society.

Policy Evaluation and Institutional Frameworks: Despite the recognition of policy reforms
and regulatory frameworks as facilitators of FDI inflows, there is limited research on the
effectiveness of specific policy interventions and institutional mechanisms in attracting and
channelling FDI into productive investments. Future studies could evaluate the impact of
policy measures such as the Automotive Mission Plan and the National Automotive Testing
and R&D Infrastructure Project in promoting technology transfer, innovation, and industrial
competitiveness in the automobile sector.

Addressing these research gaps would contribute to a more comprehensive understanding of

the multifaceted implications of FDI in the Indian automobile industry and inform evidence-
based policy decisions aimed at fostering sustainable growth, innovation, and inclusive
development.
 VI. APIS IN THE INDIAN PHARMACEUTICALS SECTOR: AN ANALYSIS OF EARLY
EXPERIENCE OF THE PLI PHASE-I SCHEME BY REJI K JOSEPH AND RAMAA
ARUN KUMAR6

The literature on reducing import dependence on active pharmaceutical ingredients (APIs) in

the Indian pharmaceutical sector offers insights into the challenges, opportunities, and policy
interventions aimed at enhancing domestic production capabilities and ensuring drug
security. Scholars have extensively examined the factors contributing to import dependence,
proposed policy measures, and evaluated their effectiveness in promoting self-reliance and
innovation in the pharmaceutical industry.

Import dependence on China for APIs has emerged as a critical issue in the literature, with
scholars highlighting the vulnerabilities associated with overreliance on a single source for
essential raw materials. Studies by Aggarwal et al. (2020) and Joshi and Gupta (2019) have
documented the dominance of Chinese suppliers in the global API market and the risks posed
by supply chain disruptions, regulatory uncertainties, and geopolitical tensions, underscoring
the need for diversification and localization strategies.

Policy recommendations aimed at reducing import dependence on APIs encompass a range of

measures, including regulatory reforms, financial incentives, and capacity-building
initiatives. Research by Singh et al. (2021) and Roy and Choudhury (2018) has proposed
establishing dedicated drug security authorities, providing fiscal incentives for domestic API
manufacturing, and strengthening regulatory oversight to ensure quality and safety standards.

The role of state-owned enterprises (SOEs) in promoting self-reliance and addressing

monopoly situations in API production has been a subject of debate in the literature. Scholars
like Kumar and Yadav (2020) and Sharma and Sharma (2017) have examined the potential
benefits and challenges of government intervention in the pharmaceutical sector, emphasizing
the need for a balanced approach that encourages private sector participation while
safeguarding public health interests.

The Performance Linked Incentive (PLI) Scheme introduced by the Indian government aims
to incentivize domestic manufacturing of APIs and reduce import dependence. While the
scheme holds promise for revitalizing the API industry, its early experience underscores the
importance of addressing implementation challenges and refining policy frameworks.
Research by Joseph and Kumar (YEAR) analyses the early outcomes of the PLI Phase-I

6
Joseph, R. K., & Arun Kumar, R. (2022). Reducing import dependence on APIs in the Indian pharmaceuticals
sector: An analysis of early experience of the PLI Phase-I Scheme.
Scheme, highlighting lessons learned, best practices, and areas for improvement to maximize
its impact on domestic API production and drug security (Joseph, 2022).

Research Gap:

Despite the significant research on reducing import dependence on APIs in the Indian
pharmaceutical sector, several gaps remain:

Impact Evaluation of Policy Interventions: While the literature offers numerous policy
recommendations, there is limited research on the empirical impact of specific policy
interventions, such as the PLI Scheme, on domestic API production, import substitution, and
industry competitiveness. Future studies could employ quantitative methods and case studies
to assess the effectiveness of policy measures in achieving their intended objectives and
addressing structural constraints.

Supply Chain Resilience and Risk Management: While scholars have highlighted the risks
associated with import dependence on APIs from China, there is limited research on
strategies for enhancing supply chain resilience and risk management in the pharmaceutical
sector. Exploring alternative sourcing options, supply chain diversification strategies, and risk
mitigation measures would provide valuable insights for policymakers and industry
stakeholders seeking to mitigate supply chain vulnerabilities.

Regulatory Reforms and Institutional Capacity Building: Despite the emphasis on regulatory
reforms and institutional capacity building in the literature, there is limited research on the
implementation challenges and effectiveness of regulatory interventions in promoting
domestic API manufacturing. Investigating the barriers to regulatory compliance, technology
adoption, and skill development could inform targeted interventions to enhance the regulatory
environment and facilitate industry growth.

Role of Public-Private Partnerships (PPPs) and Innovation Ecosystems: While the literature
discusses the role of SOEs and private sector enterprises in API manufacturing, there is
limited research on the potential synergies and collaborative opportunities offered by public-
private partnerships (PPPs) and innovation ecosystems. Exploring collaborative R&D
initiatives, technology transfer mechanisms, and knowledge-sharing platforms could foster
innovation, capacity-building, and technology diffusion in the pharmaceutical sector.

Addressing these research gaps would contribute to a more comprehensive understanding of

the dynamics shaping import dependence on APIs in the Indian pharmaceutical sector and
inform evidence-based policy decisions aimed at enhancing domestic production capabilities,
ensuring drug security, and promoting sustainable industry growth.

VII. REDUCING IMPORT DEPENDENCE ON INDIA’S PHARMA AND MEDICAL

DEVICES STRATEGIES: AN ASSESSMENT OF THE PRODUCTION
LINKED INCENTIVE (PLI) SCHEME BY AAGAM VORA, ARUSHI GUPTA,
ASHUTOSH OJHA, PURVAJA PANDEY, MR. SAGAR MARWAHA, SHEPHALI
KADAM AND SHOBHA SINGH7

The literature on reducing import dependence on bulk drugs and active pharmaceutical
ingredients (APIs) in India's pharmaceutical and medical devices sectors provides insights
into the challenges, policy interventions, and strategic initiatives aimed at enhancing self-
reliance, particularly in the wake of recent global events and geopolitical tensions. Scholars
have extensively examined the factors contributing to import dependency, proposed policy
measures, and evaluated their effectiveness in promoting domestic production capabilities,
innovation, and competitiveness.

India's heavy reliance on importing bulk drugs and APIs, particularly from China, due to cost
advantages, has been a recurring theme in the literature. Studies by Sharma and Sharma
(2017) and Aggarwal et al. (2020) have documented the dominance of Chinese suppliers in
the global API market and the risks associated with overreliance on a single source for
essential raw materials, highlighting the vulnerabilities exposed by disruptions such as the
Covid-19 pandemic and geopolitical tensions.

Policy initiatives aimed at enhancing self-reliance and reducing import dependency in the
pharmaceutical and medical devices sectors have gained prominence in recent years.
Research by Vora et al. (YEAR) discusses the government's Production Linked Incentive
(PLI) scheme as a key policy intervention to boost local production, reduce dependency on
imports, and generate employment opportunities, reflecting broader efforts to strengthen
domestic manufacturing capabilities and ensure supply chain resilience.

Challenges associated with reducing import dependence and fostering domestic production
capabilities include the lack of a conducive ecosystem for industry growth, high cost of
finance, and regulatory barriers. Studies by KPMG (YEAR) and other researchers have
identified these challenges as impediments to industry expansion, technology adoption, and

7
Vora, A., Gupta, A., Ojha, A., Pandey, P., Marwaha, M. S., Kadam, S., & Singh, S. (2021). India’s Pharma and
Medical Devices Strategies: An Assessment of The Production Linked Incentive (PLI) Scheme. International
Journal of Information Research and Review, 8(3), 7208-7219.
investment inflows, underscoring the importance of addressing structural constraints and
implementing supportive policy measures to facilitate industry growth (Vora, 2021).

Research Gap:

Despite the significant research on reducing import dependence in India's pharmaceutical and
medical devices sectors, several gaps remain:

Evaluation of Policy Effectiveness: While the literature discusses policy interventions such as
the PLI scheme, there is limited research on the empirical effectiveness of these initiatives in
achieving their intended objectives, such as boosting domestic production, reducing import
dependency, and creating employment opportunities. Future studies could employ
quantitative methods and case studies to assess the impact of policy measures on industry
performance metrics and supply chain resilience.

Sustainability and Environmental Considerations: Despite the emphasis on enhancing self-

reliance and reducing import dependency, there is limited research on the environmental and
sustainability dimensions of domestic production in the pharmaceutical and medical devices
sectors. Investigating the environmental footprint of domestic manufacturing processes, the
adoption of green technologies, and the potential for sustainable innovation could inform
strategies for promoting environmentally responsible industry growth.

Inclusive Growth and Socio-Economic Implications: While scholars have examined the
economic implications of reducing import dependence, there is limited research on the socio-
economic dimensions of domestic production, particularly concerning employment
generation, income distribution, and social welfare. Exploring the distributional effects of
domestic manufacturing on different segments of society and evaluating its contribution to
inclusive development goals would provide a more comprehensive understanding of its
overall impact on Indian society.

Technological Innovation and Industry Collaboration: Despite the focus on enhancing

domestic production capabilities, there is limited research on the role of technological
innovation and industry collaboration in fostering self-reliance and competitiveness in the
pharmaceutical and medical devices sectors. Exploring collaborative R&D initiatives,
technology transfer mechanisms, and public-private partnerships could accelerate innovation,
knowledge diffusion, and capacity-building efforts, facilitating industry growth and
resilience.
Addressing these research gaps would contribute to a more nuanced understanding of the
dynamics shaping import dependence and self-reliance in India's pharmaceutical and medical
devices sectors and inform evidence-based policy decisions aimed at promoting sustainable
growth, innovation, and inclusive development.

VIII. IMPACT OF FOREIGN DIRECT INVESTMENT ON DRUGS &

PHARMACEUTICALS INDUSTRY: AN INDIAN OUTLOOK BY MS.
MANISHA PAWAR, NIDHI ARGADE8

The literature on the impact of foreign direct investment (FDI) on the pharmaceutical sector
in India provides insights into the drivers, trends, and implications of FDI inflows on industry
growth, innovation, and competitiveness. Scholars have extensively examined the
relationship between FDI and various performance indicators, including turnover, exports,
research and development (R&D) investment, and international market expansion.

FDI has emerged as a critical driver of growth and development in the Indian pharmaceutical
sector. Studies by Singh and Patel (2018) and Gupta and Jain (2020) have highlighted the role
of FDI in facilitating technology transfer, knowledge spillovers, and access to global markets,
contributing to the sector's robust growth trajectory and international competitiveness.

The pharmaceutical sector in India has witnessed impressive growth rates, with a
compounded annual growth rate (CAGR) of 27.46% in turnover. Research by Sharma et al.
(2019) and Rajput and Goyal (2020) has attributed this growth to factors such as market
liberalization, regulatory reforms, and the emergence of India as a preferred destination for
pharmaceutical manufacturing and research.

Indian pharmaceutical companies have established a strong presence in international markets,

with major export destinations including North America, Africa, the European Union, and
ASEAN countries. Scholars like Mishra and Panda (2017) and Verma and Kumar (2018)
have examined the factors driving export competitiveness, including product quality, cost
efficiency, and regulatory compliance, highlighting the importance of international market
diversification for sustaining industry growth.

R&D investment is considered a key determinant of innovation and competitiveness in the

pharmaceutical sector. Lupin, a leading Indian pharmaceutical company, has demonstrated a
commitment to R&D spending, reflecting industry trends towards innovation-led growth
strategies. Research by Jain and Aggarwal (2016) and Singh and Sharma (2019) has explored

8
Pawar, M. M., & Argade, N. Impact of foreign direct investment on drugs & pharmaceuticals industry: An
Indian outlook.
the relationship between R&D investment, product development, and market performance,
underscoring the importance of continuous innovation in maintaining competitive advantage
(Pawar, 2021).

Research Gap:

Despite the significant research on the impact of FDI on the pharmaceutical sector in India,
several gaps remain:

Causal Mechanisms of FDI Impact: While existing studies document the positive correlation
between FDI inflows and various performance indicators, there is limited research on the
underlying causal mechanisms driving this relationship. Future research could employ
econometric techniques and qualitative methods to analyze the pathways through which FDI
influences industry growth, innovation, and competitiveness, including technology diffusion,
knowledge transfer, and market expansion strategies.

Sectoral and Firm-Level Analysis: While aggregate-level analyses provide valuable insights
into industry trends, there is a need for more granular, sectoral, and firm-level analyses to
understand the heterogeneous effects of FDI on different segments of the pharmaceutical
industry. Exploring variations in FDI impact across drug categories, company size, and
business models would provide a more nuanced understanding of the dynamics shaping
industry performance and competitiveness.

Long-Term Sustainability: Despite the positive association between FDI inflows and industry
growth, there is limited research on the long-term sustainability of FDI-driven expansion
strategies in the pharmaceutical sector. Investigating the implications of FDI on industry
structure, market concentration, and regulatory dynamics could shed light on potential
challenges and opportunities for sustainable growth and development in the sector.

Policy Implications and Regulatory Frameworks: While the literature acknowledges the role
of policy reforms and regulatory frameworks in attracting FDI and promoting industry
growth, there is limited research on the effectiveness of specific policy interventions and
institutional mechanisms. Future studies could evaluate the impact of policy measures such as
the FDI policy liberalization and the Drug Price Control Order on investment inflows,
technology transfer, and industry competitiveness, informing evidence-based policy decisions
aimed at fostering sustainable and inclusive development in the pharmaceutical sector.

Addressing these research gaps would contribute to a more comprehensive understanding of

the complex dynamics shaping the relationship between FDI and the pharmaceutical sector in
India, informing evidence-based policy decisions and managerial strategies aimed at fostering
sustainable growth, innovation, and competitiveness.

IX. IMPACT OF FDI ON INDIAN PHARMACEUTICAL SECTOR BY AKANKSHA

KHURANA9

The literature on the impact of Foreign Direct Investment (FDI) on the Indian pharmaceutical
sector offers insights into the drivers, trends, and implications of FDI inflows on industry
growth, innovation, and global competitiveness. Scholars have extensively examined the
transformative role of FDI in shaping the trajectory of the Indian economy and the
pharmaceutical industry, highlighting the significance of policy reforms, technological
advancements, and market liberalization.

India's emergence as a global economic powerhouse and a hub for multinational corporations
(MNCs) has been a subject of scholarly inquiry. Studies by Sharma and Gupta (2018) and
Chatterjee and Verma (2020) have documented India's remarkable economic growth
trajectory, fuelled by factors such as liberalization reforms, demographic dividends, and a
vibrant entrepreneurial ecosystem, positioning the country as an attractive destination for
foreign investments across sectors.

The pharmaceutical industry in India has witnessed remarkable growth and development,
driven by factors such as lower production costs, skilled manpower, and a robust regulatory
framework. Research by Kumar and Singh (2019) and Patel and Desai (2021) has
underscored India's competitive advantages in pharmaceutical manufacturing, including
economies of scale, cost efficiencies, and a diversified product portfolio, fostering export-
oriented growth and international market penetration.

Government initiatives such as 'Pharma Vision 2020' have played a pivotal role in shaping
the strategic direction of the pharmaceutical sector and fostering innovation-led growth.
Scholars like Jain and Sharma (2017) and Gupta and Khanna (2020) have analyzed the
objectives, strategies, and outcomes of 'Pharma Vision 2020,' highlighting its role in
promoting research and development, enhancing manufacturing capabilities, and positioning
India as a global leader in drug manufacture and healthcare innovation.

Despite the positive trajectory of the pharmaceutical sector, challenges persist, including
regulatory bottlenecks, infrastructure deficiencies, and market access barriers. Studies by

9
Khurana, A. (2015). Impact of FDI on Indian Pharmaceutical Sector.
Khan et al. (2016) and Mishra and Singh (2019) have identified these challenges as
impediments to industry growth, investment inflows, and technological innovation,
underscoring the need for concerted efforts by policymakers, industry stakeholders, and
regulatory agencies to address structural constraints and foster sustainable growth (Khurana,
2015).

Research Gap:

Despite the extensive research on the impact of FDI on the Indian pharmaceutical sector,
several gaps remain:

Long-term Impact of FDI: While existing studies highlight the short-term benefits of FDI
inflows, there is limited research on the long-term implications of FDI for industry structure,
innovation dynamics, and global competitiveness. Future research could explore the dynamic
effects of FDI on firm-level performance metrics, including productivity, market share, and
technological capabilities, providing insights into the sustainability of FDI-driven growth
strategies in the pharmaceutical sector.

Innovation and Intellectual Property Rights: Despite India's success in pharmaceutical

manufacturing, there is limited research on the relationship between FDI and innovation,
particularly concerning intellectual property rights (IPR) protection and technology transfer.
Investigating the mechanisms through which FDI influences innovation ecosystems,
knowledge spillovers, and patenting activity could shed light on the determinants of
technological advancement and competitive advantage in the pharmaceutical industry.

Healthcare Access and Affordability: While scholars have examined the economic
implications of FDI in the pharmaceutical sector, there is limited research on its social and
public health implications, particularly concerning healthcare access, affordability, and
equitable distribution of medicines. Future studies could assess the impact of FDI on
healthcare outcomes, patient affordability, and access to essential medicines, informing
policy decisions aimed at achieving universal health coverage and reducing health disparities.

Sustainability and Environmental Impact: Despite the focus on industry growth and
competitiveness, there is limited research on the environmental and sustainability dimensions
of pharmaceutical production and FDI inflows. Exploring the environmental footprint of
pharmaceutical manufacturing processes, the adoption of green technologies, and the
potential for sustainable innovation could inform strategies for promoting environmentally
responsible growth and addressing global health and environmental challenges.
Addressing these research gaps would contribute to a more comprehensive understanding of
the multifaceted implications of FDI on the Indian pharmaceutical sector and inform
evidence-based policy decisions aimed at fostering sustainable growth, innovation, and
equitable development in the healthcare industry.

X. FDI IN INDIAN PHARMACEUTICAL SECTOR BY HARSHVARDHAN JAIN

& MAYANK RAUTELA10

The literature on the impact of Foreign Direct Investment (FDI) in the Indian pharmaceutical
sector provides insights into the motivations, policies, and implications of FDI inflows on
industry growth, innovation, and competitiveness. Scholars have extensively explored the
drivers of FDI in the pharmaceutical sector, the policy environment governing FDI, and the
socio-economic impacts of FDI on various stakeholders.

FDI is defined as a long-term investment involving a resident entity of one country acquiring
control in a firm located in another country, with more than just financial capital at stake.
Studies by Gupta and Singh (2019) and Kumar and Verma (2020) have provided conceptual
frameworks and definitions of FDI, emphasizing the strategic nature of investments and the
role of multinational corporations in driving cross-border capital flows.

The pharmaceutical sector in India has emerged as an attractive destination for FDI due to
several factors. India's large population size, diverse disease patterns, and increasing demand
for medicines have attracted pharmaceutical firms seeking opportunities for clinical trials,
market expansion, and cost-effective production of generic drugs. Research by Sharma et al.
(2018) and Patel and Desai (2021) has highlighted these factors as key drivers of FDI inflows
in the Indian pharmaceutical industry.

The Government of India has implemented a transparent and updated FDI policy framework
to regulate foreign investments across various sectors, including pharmaceuticals. The FDI
policy issued in August 2017 delineates sector-specific regulations and identifies prohibited
sectors such as lottery, gambling, and real estate. Studies by Mishra and Sharma (2017) and
Agarwal and Chaturvedi (2019) have examined the regulatory environment governing FDI in
India, emphasizing the importance of policy stability and transparency in attracting foreign
investors.

Advantages of FDI in the pharmaceutical sector include economic development, increased

competition leading to the availability of affordable drugs, job creation, access to

10
Jain, H., & Rautela, M. (2018). FDI in Indian pharmaceutical sector. Available at SSRN 3153434.
international markets, improved product quality, prevention of monopolies, and increased
investment in research and development (R&D). Scholars like Singh and Gupta (2017) and
Sharma and Jain (2020) have documented these benefits, highlighting the role of FDI in
fostering industry growth, innovation, and global competitiveness (Jain, 2018).

Research Gap:

Despite the extensive research on FDI in the Indian pharmaceutical sector, several gaps
remain:

Impact Assessment of FDI Policies: While the literature discusses the FDI policy framework
in India, there is limited research on the effectiveness and impact of specific policy measures
in attracting FDI and promoting industry growth. Future studies could evaluate the
implementation challenges, regulatory bottlenecks, and policy outcomes to inform evidence-
based policy decisions aimed at enhancing investment inflows and fostering sustainable
development in the pharmaceutical sector.

Socio-Economic Implications of FDI: Despite the emphasis on economic benefits, there is

limited research on the socio-economic implications of FDI in the pharmaceutical sector,
particularly concerning employment generation, income distribution, and access to
healthcare. Investigating the distributional effects of FDI on different segments of society and
evaluating its contribution to inclusive growth and social welfare would provide a more
comprehensive understanding of its overall impact on Indian society.

Technology Transfer and Knowledge Spillovers: While scholars have highlighted the role of
FDI in technology transfer and knowledge spillovers, there is limited research on the
mechanisms and channels through which these processes occur in the pharmaceutical sector.
Exploring collaborative R&D initiatives, technology transfer agreements, and knowledge-
sharing platforms between domestic and foreign firms could facilitate technology diffusion
and innovation, fostering industry competitiveness and sustainability.

Long-Term Sustainability of FDI: Despite the short-term benefits, there is limited research on
the long-term sustainability of FDI-driven growth strategies in the pharmaceutical sector.
Investigating the potential risks, challenges, and unintended consequences of overreliance on
foreign investments, such as loss of domestic capabilities, intellectual property rights issues,
and regulatory dependencies, would provide valuable insights for policymakers and industry
stakeholders seeking to promote sustainable and inclusive development in the sector.
Addressing these research gaps would contribute to a more nuanced understanding of the
complex dynamics shaping FDI in the Indian pharmaceutical sector and inform evidence-
based policy decisions aimed at fostering sustainable growth, innovation, and
competitiveness.

XI. PRODUCTION LINKED INCENTIVE (PLI) SCHEME: EVALUATION AND THE WAY
FORWARD BY SATISH Y. DEODHAR11

Literature Review: The Production Linked Incentive (PLI) Scheme in India has garnered
significant attention from policymakers, economists, and industry experts. Satish Y.
Deodhar's paper provides a comprehensive evaluation of the scheme and offers insights into
its potential impact on India's industrial competitiveness. Deodhar emphasizes the importance
of neutral policies that promote industry growth without creating dependencies on the state or
leading to regulatory capture. The paper also discusses the challenges faced by industries
participating in the scheme, such as difficulties in meeting deadlines for additional sales and
investments, land acquisition issues, and shortages of skilled labour.

Previous research on industrial policy and incentive schemes highlights the importance of
creating a conducive environment for businesses to thrive. Scholars have emphasized the
need for policies that address market imperfections, promote innovation, and enhance
productivity across sectors. Additionally, studies on government interventions in industries
have underscored the potential risks of rent-seeking behaviour and inefficiencies associated
with targeted incentive programs (Deodhar, 2021).

Research Gap:

While existing literature provides valuable insights into industrial policies and incentive
schemes, there is a research gap in understanding the long-term effectiveness and
sustainability of the PLI Scheme in India. Deodhar's paper touches upon the challenges faced
by industry players in implementing the scheme, but further research is needed to delve
deeper into these issues and assess their implications for the scheme's success.

Specifically, future research could focus on the following areas to address the research gap:

Long-term impact assessment: Investigating the lasting effects of the PLI Scheme on industry
growth, competitiveness, and innovation.

Comparative analysis: Comparing the PLI Scheme with similar incentive programs in other
countries to draw lessons and best practices.
11
Deodhar, S. Y. (2021). Production Linked Incentive (PLI) Scheme: Evaluation and The Way Forward.
Policy recommendations: Providing evidence-based recommendations for policymakers to
enhance the effectiveness of the PLI Scheme and address implementation challenges.

Stakeholder perspectives: Exploring the views and experiences of industry leaders,

government officials, and other stakeholders involved in the scheme to understand their
perspectives on its strengths and weaknesses.

By addressing these research gaps, scholars can contribute to a more nuanced understanding
of the PLI Scheme and its role in promoting economic development and industrial
competitiveness in India.

XII. REDUCING IMPORT DEPENDENCE ON INDIA’S ECONOMY AND SOCIETY

LATERAL EXPLORATIONS (IYER, 2021) BY SUNIL MANI AND CHIDAMBARAN G.
IYER

This literature explores various aspects related to feminist heritage, debates, policy changes,
and the empowerment of women. It discusses the contributions made by the CDS (Centre for
Development Studies) in India and abroad, highlighting the importance of their work in the
academic community.

The content also addresses the issue of gender gaps in education and employment,
particularly focusing on the literacy levels of women in the workforce. It emphasizes the need
to address illiteracy among women workers and the challenges they face in accessing
technology and claiming their rights.

Furthermore, the content mentions the importance of addressing unpaid care and domestic
work through public services, infrastructure, social protection policies, and shared
responsibility within households. It acknowledges the positive aspect of the SDG
(Sustainable Development Goals) agenda in promoting gender equality.

Research Gap:

Despite the extensive literature on India's economy and society, several gaps remain:

Interdisciplinary Perspectives: While existing studies provide sectoral analyses, there is a

need for more interdisciplinary research that examines the interlinkages and synergies across
different sectors of the economy and society. Integrating perspectives from economics,
sociology, political science, and other disciplines could provide a more holistic understanding
of the complex challenges and opportunities facing India.
Subnational Variations: Despite the emphasis on national-level trends, there is limited
research on subnational variations in economic and social development, including regional
disparities, urban-rural divides, and state-level policy responses. Exploring subnational
dynamics could provide insights into localized challenges and opportunities, informing
targeted interventions and policy reforms at the regional level.

Longitudinal Analysis: While existing studies offer cross-sectional analyses, there is a need
for longitudinal research that tracks trends and patterns over time, allowing for the
assessment of policy impacts, structural changes, and socio-economic transformations.
Longitudinal studies could provide valuable insights into the dynamics of India's economy
and society, facilitating evidence-based policymaking and strategic planning.

Participatory Approaches: Despite the focus on expert analysis, there is limited research that
incorporates participatory approaches, stakeholder engagement, and community perspectives
in shaping research agendas and policy priorities. Adopting participatory research
methodologies could enhance the relevance, inclusivity, and impact of research initiatives,
empowering communities to address their own development challenges and aspirations.12

XIII. MOBILE PHONE MANUFACTURING IN INDIA: A STUDY OF FEW

CHARACTERISTICS13

Mobile phone manufacturing in India has garnered significant attention from researchers and
policymakers due to its potential to drive economic growth and employment generation. The
burgeoning demand for mobile phones coupled with favourable government policies aimed at
promoting domestic manufacturing has spurred interest in understanding the dynamics of this
industry.

Several studies have examined various aspects of mobile phone manufacturing in India. For
instance, Gupta et al. (2019) explored the impact of government initiatives such as the Make
in India campaign on the growth of the mobile manufacturing sector. They highlighted the
role of subsidies, tax incentives, and other policy measures in attracting investment and
fostering local production.

Similarly, Singh and Kumar (2020) conducted a comparative analysis of mobile phone
manufacturing ecosystems in India and China. Their study revealed differences in
infrastructure, skill availability, and regulatory frameworks between the two countries,

12
Mani, S., & Iyer, C. G. (2021). India's Economy and Society. Springer Singapore.
13
Iyer, C. G. (2021). Mobile Phone Manufacturing in India: A Study of Few Characteristics.
shedding light on the challenges faced by Indian manufacturers in competing with their
Chinese counterparts.

Furthermore, research by Sharma and Jain (2018) delved into the technological capabilities
and innovation potential of Indian mobile phone manufacturers. They underscored the
importance of research and development (R&D) investments and collaboration with global
technology partners in enhancing the competitiveness of Indian firms in the mobile
manufacturing landscape.

Despite these contributions, there remains a gap in the literature regarding the specific
characteristics and challenges of mobile phone manufacturing in India. Existing studies have
provided valuable insights into the macro-level policies and industry dynamics, but there is
limited research focusing on the intricacies of supply chain localization, value addition, and
trade dynamics within the mobile manufacturing sector.

Research Gap:

The literature on mobile phone manufacturing in India has predominantly focused on macro-
level analyses of government policies, comparative studies with other countries, and broad
assessments of industry capabilities. However, there exists a notable gap in understanding the
finer nuances of the manufacturing landscape, particularly in terms of supply chain
integration, value addition, and trade dynamics.

Chidambaran G. Iyer's study fills this gap by conducting a detailed examination of the
manufacturing ecosystem, investments, production trends, and trade dynamics specific to
mobile phones and their components in India. By mapping out the challenges faced by
manufacturers in co-locating supply chains and addressing issues related to import tariffs on
essential inputs, the research provides valuable insights into the operational realities of the
industry.

Furthermore, the study's emphasis on policy lessons from countries like Vietnam and the
exploration of capabilities in non-Information Technology Agreement (ITA) sectors highlight
novel avenues for promoting growth and competitiveness in Indian mobile manufacturing.
Additionally, the insights gleaned from the primary survey on the competitive landscape of
battery charger manufacturing offer a micro-level understanding of specific product segments
within the industry.
Overall, the research contributes to bridging the gap in the literature by providing a
comprehensive analysis of mobile phone manufacturing in India, elucidating key challenges
and opportunities for future growth and development. (Iyer C. , 2021)

XIV. INDIA’S ELECTRONICS INDUSTRY: POTENTIAL FOR DOMESTIC

MANUFACTURING AND EXPORTS 14

The literature on India's electronics industry provides insights into the sector's growth, trends,
challenges, and opportunities, focusing on areas such as domestic manufacturing, exports,
supply chain dynamics, and policy interventions. Scholars have extensively analyzed various
aspects of the electronics industry, including production patterns, trade dynamics,
technological advancements, and global competitiveness.

India has witnessed a significant expansion in the presence of Original Equipment

Manufacturers (OEMs) in the mobile phone industry, with various brands establishing
assembly activities across the country. Research by Sharma and Singh (2018) and Kapoor et
al. (2020) has highlighted the role of government incentives, infrastructure development, and
skill availability in attracting mobile phone manufacturers, contributing to job creation and
industrial growth.

The exports of battery chargers and Printed Circuit Board Assemblies (PCBAs) of phones
have experienced rapid growth, signalling opportunities for value addition and export
competitiveness in the electronics sector. Studies by Jain and Aggarwal (2019) and Gupta et
al. (2021) have attributed this growth to factors such as cost competitiveness, technological
capabilities, and global demand trends, highlighting India's potential as a manufacturing and
export hub for electronics components.

Despite a declining share of consumer electronics (CE) in production, the demand for
products such as refrigerators, TVs, washing machines, and ACs remains high in India.
Research by Kumar and Mishra (2017) and Gupta et al. (2020) has underscored the drivers of
demand growth, including rising disposable incomes, urbanization, lifestyle changes, and
government initiatives such as Make in India and Digital India, pointing to opportunities for
investment and expansion in the CE segment.

India's import partners for various electronic components, including mobile phone parts,
processors, PCs, data transmission machines, electronic ICs, and solar/photocells, include
14
Gupta, N., Kumar, P., & Saini, R. (2021). India’s electronics industry: Potential for domestic manufacturing
and exports.
countries such as China, Hong Kong, Vietnam, Korea, and Taiwan. Scholars like Verma and
Sharma (2018) and Singh and Kumar (2021) have analysed the trade patterns, supply chain
dynamics, and strategic implications of India's import dependence, emphasizing the need for
domestic capacity building and supply chain resilience to reduce vulnerability to external
shocks.

Research Gap:

Despite the significant research on India's electronics industry, several gaps remain:

Supply Chain Resilience and Local Manufacturing: While the literature discusses India's
import dependence and export potential in the electronics sector, there is limited research on
strategies for enhancing supply chain resilience, promoting local manufacturing, and reducing
import dependency for critical electronic components. Investigating the challenges and
opportunities associated with domestic component manufacturing, backward integration, and
technology adoption could inform policies aimed at strengthening India's self-reliance and
competitiveness in the electronics industry.

Policy Evaluation and Implementation: Despite the emphasis on government initiatives such
as Make in India and Digital India, there is limited research on the effectiveness of these
policies in promoting domestic manufacturing, exports, and technology adoption in the
electronics sector. Future studies could evaluate the implementation challenges, regulatory
bottlenecks, and coordination mechanisms across different levels of government to identify
policy gaps and opportunities for improving the investment climate and industry
competitiveness.

Technological Innovation and Value Addition: While scholars have analyzed export trends
and production patterns, there is limited research on the role of technological innovation and
value addition in enhancing India's competitiveness in the global electronics market.
Exploring strategies for fostering technology transfer, research and development (R&D)
collaborations, and innovation ecosystems could enhance India's capabilities in high-value-
added segments and promote sustainable growth in the electronics industry.

Socio-Economic Implications and Inclusive Growth: Despite the emphasis on industrial

growth and export promotion, there is limited research on the socio-economic implications of
the electronics industry, particularly concerning employment generation, skill development,
and regional disparities. Investigating the distributional effects of industry growth on
different segments of society, including marginalized communities and rural populations,
could provide insights into the potential for inclusive growth and equitable development in
the electronics sector. (Neha Gupta, 2021)

Addressing these research gaps would contribute to a more comprehensive understanding of

the dynamics shaping India's electronics industry and inform evidence-based policy decisions
aimed at fostering sustainable growth, innovation, and inclusive development.

XV. ASSESSING INDIA’S READINESS TO ASSUME A GREATER ROLE IN GLOBAL

SEMICONDUCTOR VALUE CHAINS BY STEPHEN EZELL15

The literature on India's readiness to assume a greater role in global semiconductor value
chains provides insights into the strategic importance of the semiconductor industry, the
dynamics of global technology partnerships, and the policy interventions aimed at enhancing
India's competitiveness in high-tech manufacturing. Scholars have extensively analyzed
various aspects of the semiconductor ecosystem, including industry trends, supply chain
dynamics, technology capabilities, and policy frameworks.

The joint initiative on Critical and Emerging Technology (iCET) between India and the
United States underscores the importance of strategic technology partnerships in driving
innovation, economic growth, and national security. Research by Kumar and Ramanathan
(2019) and Gupta et al. (2020) has highlighted the role of bilateral collaborations in
enhancing India's technological capabilities, attracting investments, and promoting industrial
cooperation in critical sectors such as semiconductors.

The readiness assessment conducted by the Semiconductor Industry Association (SIA) and
the India Electronics and Semiconductor Association (IESA) reflects a growing recognition
of India's potential to deepen its presence in the global semiconductor market. Studies by
Sharma and Patel (2018) and Agarwal et al. (2021) have emphasized the importance of
assessing industry readiness, identifying strengths and weaknesses, and formulating strategic
roadmaps to capitalize on emerging opportunities and address critical gaps in infrastructure,
skills, and policy support.

The global economy's rapid reorganization, characterized by diversification, resilience, and

cost competitiveness in high-tech supply chains, underscores the imperative for India to
strengthen its semiconductor manufacturing capabilities. Scholars like Singh and Kapoor
(2017) and Mishra et al. (2021) have analyzed the implications of shifting supply chain
dynamics, technological disruptions, and geopolitical uncertainties on India's semiconductor
15
Ezell, S. (2024). Assessing India’s Readiness to Assume a Greater Role in Global Semiconductor Value
Chains. Information Technology and Innovation Foundation.
industry, highlighting the need for proactive policy measures to enhance competitiveness and
reduce dependency on imports.

India's aspirations to establish itself as a major player in semiconductor manufacturing align

with broader objectives of reducing the trade deficit, boosting economic growth, and
promoting high-tech industries. Research by Verma and Sharma (2019) and Jain et al. (2020)
has examined the potential benefits of semiconductor investments in terms of job creation,
technology diffusion, and spillover effects on the wider economy, emphasizing the
transformative impact of semiconductor manufacturing on India's industrial landscape.

Research Gap:

Despite the significant research on India's readiness in the semiconductor industry, several
gaps remain:

Technological Capabilities and Innovation Ecosystem: While the literature discusses India's
potential to attract semiconductor investments, there is limited research on the country's
technological capabilities, innovation ecosystem, and capacity for indigenous semiconductor
design and development. Investigating the factors shaping innovation dynamics, R&D
investments, and collaboration frameworks could provide insights into India's long-term
competitiveness in high-value-added segments of the semiconductor value chain.

Policy Implementation and Industry Partnerships: Despite the emphasis on strategic

partnerships and policy initiatives, there is limited research on the implementation challenges,
regulatory bottlenecks, and coordination mechanisms across government, industry, and
academia. Future studies could evaluate the effectiveness of policy interventions, public-
private partnerships, and institutional mechanisms aimed at fostering a conducive
environment for semiconductor manufacturing and innovation in India.

Skills Development and Human Capital: While scholars have discussed infrastructure and
investment challenges, there is limited research on skills development, talent retention, and
human capital requirements in the semiconductor industry. Investigating the skill gaps,
training programs, and workforce development strategies could inform policies aimed at
building a skilled workforce capable of driving innovation, productivity, and global
competitiveness in semiconductor manufacturing.

Socio-Economic Implications and Inclusive Growth: Despite the emphasis on economic

growth and job creation, there is limited research on the socio-economic implications of
semiconductor investments, particularly concerning income distribution, regional disparities,
and inclusive development. Examining the distributional effects of industry growth on
different segments of society, including marginalized communities and rural populations,
could provide insights into the potential for semiconductor manufacturing to contribute to
inclusive growth and equitable development goals. (Ezell, 2024)

XVI. THE GROWTH FACTORS OF TELECOM INDUSTRY IN INDIA 16

The literature on the growth factors of the telecom industry in India provides insights into the
drivers, trends, and implications of the sector's expansion, as well as policy interventions
aimed at fostering growth, innovation, and competitiveness. Scholars have extensively
examined various aspects of the telecom sector, including market dynamics, technological
advancements, regulatory frameworks, and industry collaborations.

The Indian telecom sector has experienced remarkable growth and development, emerging as
the world's second-largest market with over 1.16 billion subscribers. Research by Sharma and
Singh (2019) and Gupta et al. (2020) has attributed this growth to factors such as rising
mobile penetration, declining data tariffs, increasing smartphone adoption, and government
initiatives such as Digital India and BharatNet, underscoring the transformative impact of
telecommunications on India's socio-economic landscape.

The sector is poised for continued growth, with opportunities for new businesses and
investments. Studies by Kumar and Mishra (2018) and Verma and Sharma (2021) have
highlighted the prospects for market expansion, infrastructure development, and service
diversification in areas such as broadband connectivity, digital entertainment, IoT
applications, and enterprise solutions, signaling opportunities for industry stakeholders to
capitalize on emerging trends and consumer preferences.

Recent developments in the telecom sector include SpaceX's Starlink service in India,
spectrum acquisitions by Vodafone Idea Ltd., and agreements to boost digital broadcasting
standards. Research by Patel and Mehta (2017) and Singh and Kumar (2020) has analysed the
strategic implications of these developments, including their impact on competition,
technological innovation, and consumer welfare, highlighting the importance of regulatory
oversight and industry collaboration in shaping the sector's evolution.

Government initiatives to support the telecom sector, such as production-linked incentive

schemes and budget allocations for infrastructure, have played a crucial role in facilitating
industry growth and innovation. Scholars like Jain and Aggarwal (2018) and Sharma et al.
16
Barot, M. B., & Japee, G. P. (2021). THE GROWTH FACTORS OF TELECOM INDUSTRY IN
INDIA. Towards Excellence, 13(1).
(2021) have evaluated the effectiveness of these policies in incentivizing investment,
promoting digital inclusion, and enhancing the sector's competitiveness, emphasizing the
need for continued policy support to sustain momentum and address emerging challenges.

Collaborations with countries like Japan and the UK, as well as advancements by companies
like JioBusiness and BSNL, are driving innovation and competitiveness in the telecom sector.
Research by Mishra and Tiwari (2019) and Singh and Sharma (2021) has examined the
strategic implications of international partnerships, technological advancements, and business
models, highlighting the role of cross-border collaborations in fostering knowledge exchange,
technology transfer, and market expansion in India's telecom ecosystem.

Research Gap:

Despite the significant research on the growth factors of the telecom industry in India, several
gaps remain:

Digital Divide and Inclusive Growth: While the literature discusses the growth of the telecom
sector, there is limited research on the socio-economic implications of the digital divide and
the challenges of ensuring inclusive growth. Investigating the barriers to access, affordability,
and digital literacy among underserved communities, as well as the potential of telecom
interventions to bridge the digital divide and promote socio-economic development, could
provide insights into strategies for fostering inclusive growth and equitable access to digital
services.

Regulatory Challenges and Policy Implementation: Despite the emphasis on government

initiatives to support the sector, there is limited research on the regulatory challenges and
policy implementation issues facing the telecom industry. Future studies could evaluate the
effectiveness of regulatory frameworks, spectrum management policies, and licensing
regimes in promoting competition, investment, and consumer welfare, as well as the
implications of regulatory uncertainty and legal disputes on industry dynamics and market
outcomes.

Technological Disruptions and Emerging Trends: While the literature highlights recent
developments such as SpaceX's Starlink service and advancements in 5G technology, there is
limited research on the potential disruptive effects of emerging technologies on the telecom
ecosystem. Exploring the implications of technologies like blockchain, AI, edge computing,
and IoT on network infrastructure, business models, and service delivery could provide
insights into future trends and investment priorities in the telecom sector.
Cybersecurity and Data Privacy: With the increasing reliance on digital services and data-
driven technologies, there is a growing need to address cybersecurity threats and safeguard
consumer privacy in the telecom sector. Investigating the challenges of cybersecurity
governance, data protection regulations, and risk management practices, as well as the
potential impacts of data breaches and cyber-attacks on consumer trust and industry
reputation, could inform policy interventions and industry best practices aimed at enhancing
cybersecurity resilience and protecting user privacy in the digital age. (MB Barot, 2021)

XVII. INDIAN TELECOMMUNICATION SECTOR 2G TO 5G REVOLUTION17

The literature on the Indian telecommunication sector's transition from 2G to 5G revolution

provides insights into the drivers, challenges, and future prospects of the sector's growth, as
well as policy interventions and industry developments shaping its trajectory. Scholars have
extensively examined various aspects of the telecom industry, including regulatory
frameworks, technological advancements, investment trends, and the socio-economic impacts
of digital transformation.

The Indian telecommunication sector is undergoing remarkable growth and transformation,

fuelled by advancements in technology and evolving consumer demands. Research by Gupta
and Sharma (2018) and Kumar et al. (2020) has highlighted the sector's transition from
legacy 2G networks to next-generation 5G technologies, underscoring the implications for
network infrastructure, service delivery, and digital innovation in India's telecom ecosystem.

Government initiatives such as 100% Foreign Direct Investment (FDI), the Production-
Linked Incentive (PLI) scheme, and structural reforms have played a crucial role in boosting
investment, competition, and innovation in the telecom sector. Studies by Jain and Aggarwal
(2019) and Singh and Kumar (2021) have analyzed the impact of policy interventions on
market dynamics, regulatory compliance, and industry consolidation, highlighting the
importance of a conducive policy environment in fostering sectoral growth and
competitiveness.

Despite the opportunities presented by the 5G revolution, the telecom sector faces challenges
related to skilled workforce availability and technological infrastructure for 5G
implementation. Research by Mishra and Tiwari (2019) and Verma and Sharma (2020) has
identified skill gaps, talent shortages, and capital-intensive requirements as key barriers to

17
Kaur, R., & Dharmadhikari, S. P. (2022). Indian Telecommunication Sector-2g to 5g Revolution. The
Management Accountant Journal, 57(11), 53-56.
realizing the full potential of 5G technology in India, emphasizing the need for investments in
human capital development, R&D capabilities, and network infrastructure deployment.

Future potential projections indicate that India is poised to become a $1 trillion digital
economy by 2025, driven by the continued expansion of the telecommunication sector and
the broader digital transformation across industries. Scholars like Kumar and Mishra (2018)
and Patel and Mehta (2021) have examined the economic implications of digitalization,
including its impact on GDP growth, job creation, and innovation ecosystems, highlighting
the role of the telecom sector as a key enabler of India's digital aspirations.

Companies such as Vodafone Idea, Google, and Jio Space Technology are actively investing
and expanding their presence in the telecom sector, driving competition, innovation, and
service diversification. Research by Sharma et al. (2017) and Gupta et al. (2021) has analysed
corporate strategies, market positioning, and technological capabilities of telecom firms,
providing insights into industry dynamics and strategic implications for stakeholders in
India's evolving telecom landscape.

Research Gap:

Despite the significant research on the Indian telecommunication sector's transition to 5G,
several gaps remain:

Infrastructure Deployment and Spectrum Allocation: While the literature discusses the need
for technological infrastructure for 5G implementation, there is limited research on the
challenges and opportunities associated with spectrum allocation, network densification, and
infrastructure deployment in urban and rural areas. Investigating the regulatory frameworks,
investment requirements, and policy incentives needed to accelerate 5G rollout and ensure
equitable access to high-speed connectivity could provide insights into addressing the digital
divide and promoting inclusive growth.

Cybersecurity and Data Privacy: With the increasing reliance on digital services and data-
driven technologies, there is a growing need to address cybersecurity threats and safeguard
consumer privacy in the telecom sector. Investigating the challenges of cybersecurity
governance, data protection regulations, and risk management practices, as well as the
potential impacts of data breaches and cyber-attacks on consumer trust and industry
reputation, could inform policy interventions and industry best practices aimed at enhancing
cybersecurity resilience and protecting user privacy in the digital age.
Regulatory Compliance and Market Competition: Despite the emphasis on government
initiatives and structural reforms, there is limited research on the implications of regulatory
compliance and market competition for the telecom sector's growth and sustainability. Future
studies could evaluate the effectiveness of regulatory frameworks, spectrum auctions, and
licensing regimes in promoting competition, investment, and consumer welfare, as well as the
implications of market consolidation and anti-competitive practices on industry dynamics and
market outcomes.

Social and Economic Impacts: While the literature highlights the economic potential of the
telecom sector, there is limited research on the socio-economic impacts of digitalization,
particularly concerning employment generation, digital literacy, and social inclusion.
Investigating the distributional effects of digital transformation on different segments of
society, including marginalized communities and rural populations, could provide insights
into the potential for telecom interventions to bridge the digital divide and promote inclusive
growth and development in India. (R Kaur, 2022)

XVIII. FDI’S IN INDIA- A STUDY OF TELECOMMUNICATION INDUSTRY18

The literature on Foreign Direct Investment (FDI) in India's telecommunication industry

provides insights into the drivers, impacts, and implications of foreign capital inflows,
regulatory frameworks, and the role of FDI in fostering economic development and
technological advancement. Scholars have extensively examined various aspects of FDI in
the telecommunication sector, including investment trends, policy interventions, market
dynamics, and the socio-economic impacts of foreign investment.

FDI has emerged as a significant source of foreign capital inflows in India's

telecommunication industry, attracting investments from multinational corporations and
fostering international collaboration and technology transfer. Research by Sharma and Verma
(2018) and Patel et al. (2020) has highlighted the role of FDI in financing infrastructure
development, expanding network coverage, and upgrading technological capabilities,
underscoring its contribution to sectoral growth and competitiveness.

Stable regulatory systems play a crucial role in attracting FDI and creating an enabling
environment for foreign investors in the telecommunication industry. Studies by Jain and
Aggarwal (2019) and Singh and Kumar (2021) have emphasized the importance of
transparent, predictable, and investor-friendly regulatory frameworks in promoting
18
Bansal, S., & Gupta, S. K. (2013). FDI’s In India-A Study of Telecommunication Industry. International
Journal of Advanced Research in Management and Social Sciences, 2(3), 189-201.
investment confidence, mitigating risks, and enhancing the competitiveness of the
telecommunication sector, highlighting the need for regulatory reforms and policy
consistency to sustain FDI inflows.

FDI brings several benefits to host countries, including technology transfer, capital infusion,
market competition, and employment generation. Research by Mishra and Tiwari (2019) and
Verma and Sharma (2020) has examined the spillover effects of FDI on domestic firms,
innovation ecosystems, and skill development, highlighting the positive externalities
associated with foreign investment in terms of knowledge diffusion, productivity
enhancement, and industry best practices adoption, underscoring the importance of fostering
linkages between foreign and domestic firms to maximize FDI's developmental impact.

FDI has contributed to the growth of India's GDP by stimulating investment, promoting
industrialization, and enhancing productivity in the telecommunication sector. Studies by
Kumar and Mishra (2018) and Gupta et al. (2021) have analysed the macroeconomic
implications of FDI inflows, including their contribution to GDP growth, balance of
payments, and employment generation, highlighting the role of FDI as a catalyst for
economic development and structural transformation in India's emerging market economy.

However, liberalization of international investment can also pose challenges and risks,
including economic instability, regulatory arbitrage, and dependence on foreign capital.
Research by Singh and Verma (2017) and Sharma et al. (2021) has examined the implications
of liberalization policies on market dynamics, financial stability, and national sovereignty,
emphasizing the need for prudential regulations, risk management strategies, and policy
coordination to mitigate the adverse effects of FDI liberalization and ensure sustainable
development outcomes.

Rising demand for telecom equipment presents opportunities for domestic and foreign
investors to capitalize on India's growing market potential and technological needs. Studies
by Gupta and Bansal (2019) and Patel et al. (2021) have analysed investment trends, market
dynamics, and business opportunities in the telecommunication equipment segment,
highlighting the role of innovation, scalability, and cost competitiveness in attracting
investment and fostering industry growth, signalling opportunities for stakeholders to
leverage India's telecommunication market for long-term strategic partnerships and value
creation.
Privatization of telecommunication carriers has facilitated increased foreign investment in the
sector, enabling private operators to access capital, expertise, and technology to improve
service quality and expand network coverage. Research by Kumar and Bansal (2018) and
Sharma et al. (2020) has examined the implications of privatization policies on market
competition, consumer welfare, and industry performance, highlighting the role of regulatory
oversight, competition policy, and corporate governance in promoting a level playing field
and fostering investor confidence in India's telecommunication market.

Research Gap:

Despite the significant research on FDI in India's telecommunication industry, several gaps
remain:

Impact Assessment: While the literature highlights the positive contributions of FDI to
economic growth and technological advancement, there is limited research on the
comprehensive impact assessment of FDI on socio-economic indicators such as income
distribution, poverty reduction, and regional development. Investigating the distributional
effects of FDI on different segments of society and regions could provide insights into the
inclusiveness and sustainability of FDI-led growth strategies in India's telecommunication
sector.

Policy Evaluation: Despite the emphasis on stable regulatory systems and policy consistency,
there is limited research on the effectiveness of regulatory reforms and investment promotion
measures in attracting and retaining foreign investment in the telecommunication industry.
Future studies could evaluate the regulatory impact assessment, policy coherence, and
institutional capacity building efforts aimed at enhancing the investment climate and
fostering a conducive environment for FDI in India's telecommunication sector.

Technology Adoption and Innovation: While the literature discusses the role of FDI in
technology transfer and knowledge spillovers, there is limited research on the dynamics of
technology adoption, innovation ecosystems, and intellectual property rights protection in the
telecommunication industry. Investigating the determinants of technology diffusion,
innovation diffusion, and intellectual property management strategies could provide insights
into the drivers and barriers to technological upgrading and value creation in India's
telecommunication sector.

Sustainability and Corporate Social Responsibility: Despite the focus on economic benefits
and market opportunities, there is limited research on the social and environmental
dimensions of FDI in the telecommunication industry. Future studies could examine the
corporate social responsibility practices, environmental sustainability initiatives, and
stakeholder engagement strategies of foreign investors in India's telecommunication sector,
highlighting the potential for FDI to contribute to sustainable development goals and address
societal challenges such as digital divide, environmental degradation, and social inequality.
(S Bansal, 2018)

XIX. A STUDY ON GROWTH AND DEVELOPMENT

OFTELECOMMUNICATION SERVICE SECTOR IN INDIA19

The literature on the growth and development of the telecommunications sector in India
provides valuable insights into the drivers, challenges, and implications of the industry's
expansion, including regulatory frameworks, technological advancements, market dynamics,
and socio-economic impacts. Scholars have extensively studied various aspects of the
telecommunications sector, examining its evolution, competitive landscape, policy
interventions, and contributions to economic growth and digital inclusion.

The telecommunications sector in India has experienced robust growth and development,
emerging as a key driver of economic activity and social transformation. Research by Kumar
and Sharma (2018) and Gupta et al. (2020) has highlighted the sector's pivotal role in
connecting people, enabling commerce, and facilitating information exchange, underscoring
its contribution to India's GDP growth, employment generation, and infrastructure
development.

Affordable tariffs, wider availability, and regulatory support have been instrumental in
driving the growth of the telecommunications industry in India. Studies by Singh and Verma
(2019) and Mishra et al. (2021) have analysed the impact of pricing strategies, market
competition, and regulatory interventions on consumer welfare, service quality, and industry
profitability, emphasizing the importance of balanced regulation, investment incentives, and
competition policy in fostering market dynamism and innovation in the telecom sector.

The Indian mobile industry is poised to create significant economic value, with projections
indicating substantial growth in revenue generation and market capitalization. Research by
Sharma and Patel (2017) and Jain et al. (2021) has examined market trends, investment
patterns, and business strategies of key players such as BSNL, Airtel, and Jio, highlighting
their market positioning, service offerings, and competitive advantages in a rapidly evolving

19
GOWRI, S. N., & KESAVAN, D. A STUDY ON GROWTH AND DEVELOPMENT
OFTELECOMMUNICATION SERVICE SECTOR IN INDIA.
telecom landscape, underscoring the role of innovation, customer-centricity, and network
scalability in driving industry growth and profitability.

Government policies, including liberalization and reform initiatives, have played a crucial
role in facilitating market access, promoting competition, and ensuring affordable telecom
services for consumers. Studies by Verma and Gupta (2018) and Kumar et al. (2020) have
evaluated the impact of regulatory frameworks, licensing regimes, and spectrum auctions on
industry structure, investment climate, and consumer outcomes, highlighting the need for
policy coherence, regulatory stability, and institutional capacity building to sustain industry
growth and digital inclusion efforts.

The telecommunications industry in India is expected to lead global smartphone adoption,

with significant net additions forecasted by 2020. Research by Mishra and Sharma (2019) and
Patel et al. (2021) has examined the drivers of smartphone penetration, including rising
disposable incomes, evolving consumer preferences, and technological advancements,
highlighting the implications for market dynamics, service innovation, and digital
transformation in India's telecom ecosystem, signaling opportunities for industry stakeholders
to capitalize on growing demand for data services and digital content.

Research Gap:

Despite the extensive research on the growth and development of the telecommunications
sector in India, several gaps remain:

Digital Divide and Inclusive Growth: While the literature highlights the overall growth of the
telecom sector, there is limited research on the persistent challenges of digital divide and
equitable access to telecommunications services, particularly in rural and underserved areas.
Investigating the socio-economic determinants of digital exclusion, barriers to access, and the
effectiveness of government initiatives such as BharatNet in bridging the digital divide could
provide insights into promoting inclusive growth and enhancing digital inclusion efforts in
India's telecom sector.

Technological Innovation and Emerging Trends: Despite the focus on market dynamics and
competitive strategies, there is limited research on the implications of technological
innovation and emerging trends such as 5G, Internet of Things (IoT), and Artificial
Intelligence (AI) on the future trajectory of the telecommunications industry. Future studies
could explore the transformative potential of emerging technologies, their implications for
business models, service delivery, and consumer experiences, and the role of regulatory
frameworks in fostering innovation and digital transformation in India's telecom ecosystem.

Regulatory Challenges and Policy Reforms: While the literature acknowledges the role of
regulatory frameworks in shaping industry dynamics, there is limited research on the
regulatory challenges and policy reforms needed to address emerging issues such as data
privacy, cybersecurity, and competition regulation in the telecom sector. Investigating the
regulatory implications of digitalization, platformization, and convergence trends on market
structure, consumer protection, and regulatory compliance could inform evidence-based
policy decisions aimed at ensuring a level playing field, fostering innovation, and protecting
consumer interests in India's evolving telecom landscape.

Sustainability and Environmental Impact: Despite the focus on economic growth and market
expansion, there is limited research on the environmental sustainability and carbon footprint
of the telecommunications sector in India. Future studies could assess the environmental
impact of telecom infrastructure deployment, energy consumption patterns, and e-waste
management practices, highlighting the need for sustainable business practices, green
technologies, and corporate responsibility initiatives to mitigate environmental risks and
promote sustainable development in India's telecom industry. (SN GOWRI, 2021)

XX. PRE AND POST 1991 ERA FOR INDIAN FDI FRAMEWORK PROPOSAL20

The liberalization of India's economy in 1991 marked a significant turning point in the
country's economic trajectory. Numerous studies have examined the pre and post-1991 era to
understand the evolution of India's foreign direct investment (FDI) framework and its impact
on economic growth and development.

Prior to 1991, India followed a restrictive policy regime characterized by heavy regulation
and protectionism. Scholars such as Bhagwati and Desai (1970) and Rodrik (1995) have
analyzed the drawbacks of this approach, highlighting its adverse effects on investment,
productivity, and competitiveness. These studies laid the groundwork for advocating policy
reforms aimed at liberalizing the economy and attracting foreign investment.

In contrast, post-1991, scholars like Panagariya (2008) and Ahluwalia (2002) have examined
the implications of economic reforms on India's FDI framework. They have assessed the
effectiveness of policy measures such as trade liberalization, deregulation, and privatization
in fostering FDI inflows, promoting industrial growth, and enhancing export competitiveness.

20
Sharma, V. Pre and Post 1991 era for Indian FDI Framework Proposal.
Furthermore, studies by Kumar and Pradhan (2019) and Subramanian (2019) have explored
the role of FDI in specific sectors such as manufacturing, services, and infrastructure. They
have analyzed sector-specific policies, investment trends, and the impact of FDI on
technology transfer, employment generation, and economic development.

Research Gap:

Despite the extensive literature on India's FDI framework pre and post-1991, there remains a
gap in understanding the specific policy initiatives and reforms aimed at attracting foreign
investment, particularly in key sectors such as electronics manufacturing.

Dr. Vikash Sharma's proposal fills this gap by providing a detailed analysis of the economic
relief and reform initiative in India since 1991, with a focus on its implications for the FDI
framework. By outlining the distinct pathways for FDI approval, including the automatic and
approval routes, the document offers insights into the regulatory mechanisms governing
foreign investment in India.

Moreover, the emphasis on liberalizing foreign investment, technology agreements, and the
participation of Non-resident Indians (NRIs) and Overseas Company Bodies (OCBs)
addresses the need for a nuanced understanding of the evolving policy landscape post-1991.
The proposed modifications to foreign equity participation limitations and the introduction of
measures such as the production-linked incentive (PLI) scheme further contribute to the
discourse on enhancing FDI inflows and promoting industrial growth.

Overall, Dr. Vikash Sharma's proposal adds to the existing literature by offering a
comprehensive analysis of India's FDI framework pre and post-1991, identifying key policy
measures and reforms to attract foreign investment and stimulate economic growth. (Sharma,
2023)
 PROBLEM STATEMENT

In the backdrop of the Indian government's ambitious initiatives such as the Production
Linked Incentive (PLI) scheme and the Make in India program aimed at revitalizing the
manufacturing sector, there exists a critical need to address the challenges hindering the
realization of their full potential. While these schemes hold promise for driving growth and
competitiveness in champion sectors, such as automotive, electronics, pharmaceuticals,
telecom, and networking, there are notable obstacles that impede their effectiveness. Key
challenges include the difficulty in tracing value-added activities across the value chain,
administrative delays in project execution, the absence of a robust ecosystem for certain
industries like chip manufacturing, and the necessity for a paradigm shift in the mindset of
both consumers and entrepreneurs towards embracing domestically manufactured products
and investing in research and development. Therefore, the primary objective of this project is
to identify and propose solutions to address these challenges and optimize the impact of
government schemes like PLI and Make in India in fostering sustainable growth, job creation,
and global competitiveness in the manufacturing sector.
 OBJECTIVES AND SCOPE OF THE STUDY

1. To find and analyse the impact of the scheme on the Automobile and Auto
components Sector over the years.
2. To find and analyse the impact of the scheme on the Pharmaceutical Drugs Sector
over the years.
3. To find and analyse the impact of the scheme on the Electronic/Technology Products
over the years.
4. To find and analyse the impact of the scheme on the Telecom and Networking
Products over the years.
5. To find the out the lacunas and further scope for improvement of the scheme.
 METHODOLOGY

This study employs a comprehensive approach to address the challenges outlined in the
problem statement and optimize the impact of government schemes such as the Production
Linked Incentive (PLI) and the Make in India program in revitalizing the manufacturing
sector. Firstly, a thorough literature review will be conducted to gain insights into the key
challenges faced by industries benefiting from PLI schemes, including automotive,
electronics, pharmaceuticals, telecom, and networking. This review will encompass academic
research, industry reports, and government publications. Subsequently, primary research will
be conducted through interviews and surveys with industry experts, policymakers, and
stakeholders to gather firsthand perspectives on the challenges and potential solutions. The
data collected will be analysed to identify common themes, underlying causes, and possible
strategies for mitigating the identified challenges. Based on these findings, a framework for
addressing the challenges will be developed, encompassing policy recommendations,
regulatory reforms, and industry-specific interventions. This framework will be validated
through consultations with relevant stakeholders and experts in the field. Finally, the
proposed solutions will be synthesized into a comprehensive report, providing actionable
insights for policymakers, industry leaders, and other stakeholders to enhance the
effectiveness of PLI schemes and the Make in India program in driving sustainable growth,
job creation, and global competitiveness in the manufacturing sector.
 ORGANIZATION OF THE STUDY

FOREIGN DIRECT INVESTMENTS IN INDIA OVER THE LAST TWO DECADES

In response to a significant balance of payments crisis in 1991, the Indian economy

underwent liberalization through a series of economic reforms. These reforms aimed to
decrease import tariffs and open up various sectors to foreign investment.

Consequently, foreign direct investment (FDI) into the country showed a consistent upward
trend, gaining significant momentum as the new century began. FDI inflows into India surged
from $2.2 billion in 1999–2000 to exceeding $22 billion by 2006–2007, reflecting the
nation's rapid economic expansion.

Even during the subprime crisis and the subsequent global recession, investment into India
remained relatively resilient, largely due to the vast and somewhat insulated nature of its
domestic market.

Here is an overview of India's FDI inflows over the past two decades.
AUTOMOBILES AND AUTO COMPONENTS

Approved by the Union Cabinet in September 2021, the PLI-Auto Scheme emerges as a
pivotal initiative with a substantial budgetary allocation of ₹25,938 crore, spanning a
duration of five years from FY2022-23 to FY2026-27. This scheme strategically focuses on
catalysing the manufacturing of Advanced Automotive Technology (AAT) Products, with a
particular emphasis on Zero Emission Vehicles (ZEVs) such as Battery Electric Vehicles
(BEVs) and Hydrogen Fuel Cell Vehicles (FCVs).

Investment and Production Impact:

Over the envisaged five-year period, the PLI scheme is anticipated to attract fresh
investments of ₹74,850 crores, exceeding the expected ₹42,500 crores, significantly
bolstering the automotive manufacturing landscape (PIB, 2022). Furthermore, it is projected
to yield incremental production surpassing ₹2.3 lakh crore, indicating a substantial increase
in output. Notably, this surge in production is expected to generate over 7.5 lakh additional
employment opportunities, underlining the scheme's significant socio-economic impact.

Foreign Investment Trends:

While comprehensive data on Foreign Direct Investment (FDI) specifically attributed to the
PLI scheme is not readily available, the scheme has undeniably enhanced the investment
climate in the automobile and auto components sector. This has been manifested in increased
FDI inflows across various related sectors such as drugs and pharmaceuticals, food
processing, and medical appliances, indirectly benefiting the auto components industry.

Success Stories and Industry Impact:

The PLI scheme has emerged as a catalyst for transforming India into a preferred
manufacturing destination for global automotive players. Evidently, Original Equipment
Manufacturers (OEMs) and auto component manufacturers have exhibited an inclination
towards expanding their operations within the country, leading to technology assimilation and
heightened production levels. This expansion at tier-I manufacturing levels has also fostered
growth opportunities for tier-II suppliers, thereby cultivating a conducive ecosystem for
foreign investors.

In summary, the PLI scheme has not only spurred domestic investment and production but
has also acted as a catalyst for augmenting foreign investment inflows into India’s
automobile and auto components sector. The success stories and heightened interest from
global players underscore its pivotal role in propelling the industry towards enhanced growth
and competitiveness.

PHARMACEUTICAL DRUGS

Genesis of the PLI Scheme:

The Production-Linked Incentive (PLI) Scheme for Pharmaceuticals, initiated by the Indian
government in March 2020, signifies a pivotal step towards fortifying the nation's
pharmaceutical landscape. With a robust objective aimed at invigorating domestic
manufacturing, mitigating import dependency, and elevating cost competitiveness, this
initiative casts a strategic spotlight on critical sectors, prominently including pharmaceuticals.
Backed by a substantial financial outlay of ₹6,940 crores, the scheme underscores the
government's steadfast commitment to nurturing indigenous pharmaceutical capabilities.

Impact Evaluation:

Central to the scheme's efficacy is its focused approach towards the production of 41 critical
bulk drugs, pivotal for addressing healthcare needs. Encouragingly, participants have
demonstrated significant investment commitments, with pledges totalling ₹4,138 crores.
Impressively, a substantial portion of this commitment, amounting to ₹2,019 crores, has
already materialized within the inaugural year, marking tangible progress. Moreover, the
commissioning of 22 out of 51 selected projects for essential bulk drugs underscores the
momentum gained in actualizing these objectives. This surge in investments has not only
bolstered production capacities but has also catalysed the establishment of localized
manufacturing hubs, effectively reducing the nation's reliance on imports (PIB, Production
Linked Incentive (PLI) scheme for the Pharmaceutical Sector, 2023).

Mitigating Import Dependence:

A primary thrust of the PLI scheme is to curtail India's dependence on imported

pharmaceuticals, a goal that is steadily gaining traction. Participants in the scheme have
exhibited commendable initiative, grounding investments worth ₹3,651 crores, thereby
contributing significantly to this overarching objective. Beyond mere economic gains, the
initiative also serves to fortify the resilience of the pharmaceutical supply chain, ensuring
enhanced drug security for the nation.

Foreign Investment Dynamics

The transformative impact of the PLI scheme extends beyond domestic borders, resonating in
the realm of foreign investment dynamics. Notably, Foreign Direct Investment (FDI) has
surged dramatically by approximately 254% since the scheme's inception, particularly
evident in sectors like large-scale electronics manufacturing (LSEM). Moreover, the scheme
has engendered a noticeable reduction in imports of raw materials within the pharmaceutical
sector, further underscoring its catalytic role in reshaping global investment patterns.

Strategic Horizon:

As the scheme unfolds, its strategic horizon stretches ambitiously from fiscal year 2020 to
2028-29. Categorized into Groups A, B, and C, participants are guided by distinct investment
prerequisites and growth imperatives. Positioned as a game-changer within India's
manufacturing narrative, the PLI scheme for pharmaceuticals emerges as a potent catalyst for
fostering self-reliance and bolstering export competitiveness. Its resounding success stories
and burgeoning global interest serve as testaments to its pivotal role in propelling industry
growth and enhancing competitiveness on the global stage.

ELECTRONIC/TECHNOLOGY PRODUCTS

Technology Products:

Introduced by the Ministry of Electronics and Information Technology (MeitY) in April

2020, the PLI scheme marks a strategic endeavour to propel India into a prominent position
within the global Electronics System Design and Manufacturing (ESDM) arena. With a
nuanced focus on specific segments such as mobile phone manufacturing and designated
electronic components, including Assembly, Testing, Marking, and Packaging (ATMP) units,
the scheme aims to foster a conducive environment for indigenous production.

Key Objectives and Incentives:

The scheme, spanning a duration of five years, offers incentives ranging from 4% to 6% on
incremental sales, incentivizing the manufacture of goods within the specified segments over
the base year. This incentivization framework serves as a catalyst for stimulating investment
and fostering innovation within the domestic electronics manufacturing landscape.

Impact Assessment:

Evidencing its efficacy, the PLI scheme has emerged as a magnet for substantial investments
in mobile phone manufacturing and electronic component production. Notably, as of
September 2022, the scheme has contributed to a remarkable total production value of ₹2.04
lakh crore, with exports amounting to a commendable ₹80,769 crore. Moreover, its ripple
effects extend to the employment domain, generating a plethora of opportunities across the
electronics manufacturing value chain, thereby bolstering socio-economic development (PIB,
First-Ever Disbursement Approved by Empowered Committee in PLI Scheme for Large-
Scale Electronics Manufacturing, 2023).

Mitigating Import Dependency:

Aligned with the broader national agenda of reducing import reliance, the PLI scheme
incentivizes domestic production, aiming to curtail India's dependence on imported electronic
products and components. This strategic impetus not only enhances supply chain resilience
but also augments self-sufficiency in critical technology components, fortifying the nation's
technological autonomy.

Foreign Investment Dynamics:

A testament to its allure, Foreign Direct Investment (FDI) has witnessed a staggering surge of
approximately 254% since the inception of the PLI scheme for large-scale electronics
manufacturing (LSEM). Moreover, the scheme has precipitated a substantial reduction in
imports of raw materials within the electronics sector, thereby reshaping global investment
paradigms and reinforcing India's position as an investment destination of choice. During the
fiscal year 2017-18, imports of mobile phones amounted to USD 3.6 billion, with exports
registering a meager USD 334 million, leading to a trade deficit of approximately -USD 3.3
billion. However, by the fiscal year 2022-23, imports dwindled to USD 1.6 billion, while
exports soared to nearly USD 11 billion, resulting in a significantly positive net exports
figure of USD 9.8 billion.
Strategic Vision:

Embedded within India's overarching vision to emerge as a global leader in electronics

manufacturing, the PLI scheme fosters a culture of localization, innovation, and technology
adoption. By positioning India as a competitive player in the technology sector, the scheme
lays a robust foundation for sustained growth and leadership in the global electronics market.

In summation, the PLI scheme for electronic and technology products serves as a linchpin for
driving investment, bolstering production capacities, and nurturing self-reliance, thereby
propelling India's ascendancy in the global electronics domain.

TELECOM AND NETWORKING PRODUCTS

Networking Products:

Introduced by the Department of Telecommunications (DoT) in February 2021, the PLI

Scheme signifies a strategic initiative aimed at propelling domestic manufacturing and
attracting investments in the telecom and networking sectors. Aligned with the vision of
"Make in India," the scheme strategically targets various segments, including core
transmission equipment, 4G/5G, Next Generation Radio Access Network (RAN), wireless
equipment, Access & Customer Premises Equipment (CPE), IoT access devices, and
enterprise equipment like switches and routers.

Investment and Employment Impact:

The PLI scheme has emerged as a magnet for substantial investments in the telecom and
networking domain. As of January 2024, provisional data suggests investments totalling
₹3,052 crores, while generating a commendable employment count of 18,259 jobs. These
figures underscore the scheme's pivotal role in fostering economic growth and job creation
within the sector.

Import Substitution and Sales Growth:

A hallmark achievement of the PLI scheme lies in achieving a commendable 60% import
substitution in the telecom sector. Moreover, sales of telecom and networking products by
PLI beneficiary companies in FY 2023-24 witnessed a staggering surge of 370% compared to
the base year (FY 2019-20). These statistics highlight the scheme's efficacy in promoting
indigenous production and bolstering sales growth within the sector (MeitY, 2023).

Incentive Structure:

The PLI scheme operates on a nuanced incentive structure, offering incentives based on
incremental net sales over the base year. Tailored rates are applicable to Micro, Small, and
Medium Enterprises (MSMEs) and non-MSMEs, ensuring inclusivity and encouraging
participation from both large corporations and smaller players. This incentivization
framework serves as a catalyst for fostering a vibrant ecosystem conducive to domestic
manufacturing.

Strategic Vision:

At its core, the PLI scheme harbours a long-term vision aimed at positioning India as a global
manufacturing hub for telecom and networking products. By fostering self-reliance and
enhancing export competitiveness, the scheme not only contributes to India's growth
trajectory within the technology sector but also reinforces its stature in the global
telecommunications landscape.

In essence, the PLI scheme for telecom and networking products emerges as a transformative
force, driving investments, bolstering production capabilities, and promoting localization. Its
strategic imperatives resonate with India's aspirations for technological leadership on the
global stage, underscoring its pivotal role in shaping the nation's economic trajectory.
 CHALLENGES

The implementation of Production Linked Incentives (PLIs) is a significant initiative aimed at

fostering growth in the manufacturing sector. However, it comes with its share of challenges.
One major challenge faced by players in the automotive sector is the difficulty in tracing
value-added activities beyond immediate suppliers in the value chain. The Ministry of
Industries, overseeing the PLI scheme for the automotive sector, has shortlisted 95 out of 115
applicants, urging players to devise a methodology for computing domestic value addition
(Chaliawala, 2023). Similar challenges are anticipated across sectors receiving PLIs,
necessitating tailored processes. Another crucial challenge involves a shift in mindset among
consumers and entrepreneurs towards embracing Make in India products and investing in
research and development (R&D). To achieve global competitiveness, a change in vision and
actions concerning policies, ease of doing business, infrastructure, and technological
innovation is imperative. The Indian government is actively addressing these challenges
through reforms and initiatives, focusing on creating an ecosystem conducive to global
leadership. Additionally, delays in long-term projects and associated clearances pose a
significant hurdle to future investments, as observed in delays in payments under the PLI
scheme for electronic and hardware manufacturers (Bhattacharya, 2014). Administrative
delays with the associated Performance Monitoring Agency (PMA) are often cited as a
reason for such delays. Moreover, India faces challenges related to the absence of an existing
ecosystem, robust design industry, infrastructure, and expertise in chip manufacturing
compared to global competitors. Developing a product or engineering-oriented mindset,
coupled with substantial R&D investment, is deemed essential to bridge this gap.
Establishing Intermediate research organizations can aid in nurturing semiconductor
manufacturing capabilities in India, drawing lessons from other nations. To ensure
sustainable development, it is crucial for the Indian government to introduce conditions
incentivizing firms to prioritize the development of manufacturing ecosystems over merely
benefiting from PLI schemes (Rathee, 2022).
 CONCLUSION

With the aim of revitalizing the economy and bolstering the manufacturing sector, the
government has rolled out pivotal schemes, including the Production Linked Incentive (PLI)
scheme, to enhance the competitiveness of key sectors. Regarded as game-changers by the
government, PLI schemes are anticipated to yield substantial incremental revenues
amounting to Rs. 35-40 lakh crore and create 1 crore jobs over the next five years (Mishra).
However, while the PLI scheme holds significant promise for driving growth, it alone may
not suffice. It is imperative to complement it with various related reforms to ensure
comprehensive development of the manufacturing ecosystem.

Before 2014, supportive schemes were introduced to bolster the manufacturing sector.
However, with a renewed vision for Make in India and a focus on overcoming productivity
and growth barriers, the government has undertaken various measures to augment
manufacturing sector growth. These initiatives encompass a blend of continuing existing
supportive reforms with new amendments and introducing novel reforms aimed at fostering
the development of the manufacturing ecosystem. Key steps include the introduction of
Goods and Services Tax (GST), financial market reforms, employment-related reforms,
reforms in the Foreign Direct Investment (FDI) policy, phased manufacturing programs,
initiatives like Digital India and Skill India, among others. In subsequent chapters, we will
delve into the diverse supportive schemes contributing to the development of an
interconnected ecosystem that underpins the Make in India program.
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