According to a research by rating agency Crisil, Gujarat, Tamil Nadu, and Karnataka are likely to get the majority of the capex (capital expenditure) investments brought about by the production-linked incentive (PLI) plan. The anticipated PLI capex under the nine sectors is expected to benefit the three states by around 72%.
Prime Minister Narendra Modi created the PLI plan to promote domestic manufacturing.
Gujarat, Tamil Nadu, and Karnataka “are poised to be the primary beneficiaries of the CAPEX investments generated by the PLI (Production Linked Incentive) scheme,” according to a CRISIL Market Intelligence and Analysis (MI&A) research. These states are anticipated to lead the way in gaining from the plan’s economic advantages.
Out of the 14 industries examined by the PLI (production-linked incentive) scheme study, nine are highlighted in the CRISIL report. In all, it is anticipated that these industries—which also include ACC batteries, solar PV, textiles, mobile devices, food processing, telecom products, commodities, IT hardware, and medical equipment—will bring in investments totaling Rs 2.8 lakh crore throughout the country.
Gujarat is expected to get a significant portion of India’s planned 2.8 lakh crore PLI capex, with investments totaling more than 36,000 crore. Gujarat has seen a significant increase in PLI investments across a number of industries, including the advanced chemistry cell (ACC) battery industry, solar photovoltaics, textiles, and food processing, which together account for Rs 9,000 crore in investments.
Tamil Nadu occupies the top spot in expected PLI CAPEX, accounting for more than Rs 42,000 crore, or one-third of the total, and holding a dominant position. The second-highest receiver, Gujarat, is not far behind with 28% of the share, or more over Rs 36,000 crore.
The third-place finisher is Karnataka, which received an estimated investment of Rs 14,000 crore and captured 11%. Contrastingly, the other 25 Indian states jointly contribute just 28%, totaling around Rs 36,000 crore in investments throughout the PLI scheme’s nine major areas.
Gujarat is likely to win a dominating share of more than 76 percent of the estimated PLI CAPEX for the solar PV industry, amounting to more than Rs 24,000 crores, while Andhra Pradesh is anticipated to grab the remaining 24 percent. The ACC battery industry, with a potential investment of Rs 52,000 crore, has the biggest potential of the nine sectors under consideration.
With a 67% stake, or almost Rs 35,000 crore, Tamil Nadu is positioned to earn the most from this potential, while Gujarat and Karnataka are expected to capture 17%, or around Rs 9,000 crore, in the ACC battery market.
“India’s PLI scheme has a current CAPEX estimate of Rs 2.8 lakh crore, with Rs 1.4 lakh crore already earmarked for specific locations,” said Hetal Gandhi, director of research at CRISIL MI&A. The majority of these investments are expected to go to Gujarat, which will be followed closely by Tamil Nadu and Karnataka.
He continued by saying that Gujarat is the appropriate center for PLI industries with significant power demands since it has been an energy surplus state for 20 years. Low power prices, a solid infrastructure, efficient approval procedures, and other benefits make it a top option for PLI industry leaders wishing to drive their expansion.
