India's PLI Schemes: Key to Gaining Ground in Global Trade

The State Bank of India report advises expanding Production-Linked Incentive schemes to enhance India's global trade competitiveness. The report highlights opportunities in U.S. exports amid tariff changes. The expansion to sectors like textiles and engineering is urged to increase market share and stimulate domestic investment.

In a recent report, the State Bank of India (SBI) underlined the need for India to bolster its Production-Linked Incentive (PLI) schemes in response to intensifying global trade competition. The report advocates for expanding these schemes, especially after former U.S. President Donald Trump's introduction of reciprocal tariffs affecting several nations, including India.

The SBI report recommends that the Indian government broaden the PLI schemes to encompass key sectors like textiles, engineering goods, and gems and jewellery. By including a greater range of products and extending the scheme's term by three years, India could enhance investments in domestic industries and improve the competitiveness of its products on the world stage.

According to the report, India has a potential advantage in exporting to the U.S. as tariffs on Chinese goods rise. This could be particularly beneficial in sectors such as textiles, apparel, and footwear. However, the report also points out the disparity between U.S. tariffs on Indian goods at 26%, compared to India's 15% on American products, urging for trade negotiations to address this imbalance.

(With inputs from agencies.)