Calls grow louder for PLI push to mitigate looming trade risks

As the United States (US) imposes reciprocal tariffs on India, expanding the production-linked incentive (PLI) scheme may be key to upholding the ambitious 'Make in India' initiative and mitigating the potential trade impact, say experts.

- BS REPORTERS

US President Donald Trump has announced reciprocal tariffs of 27 per cent on imports from India.

However, certain goods - pharmaceutical products, semiconductors, lumber articles, copper and gold, energy resources and select minerals - have been spared the rod. Moreover, steel, aluminium, automobiles, and auto components are already covered under Section 232 duties. Economists feel that the tariffs announced by Trump could compel India to go faster on reforms and push the pedal further on its programmes such as 'Make in India' and the PLI scheme.

Bigger push for PLI The PLI scheme was launched in 2020 to position India as a global manufacturing hub. With an outlay of 1.97 trillion.

Madan Sabnavis, chief economist, Bank of Baroda, believes that the government would have to push the schemes and provide protection to domestic industries. "The sectors impacted by the reciprocal tariffs are textile, precious stones and to a small extent pharma which involve small and medium enterprises. There could be a bigger push for PLI here."