Recent reports say that the Indian production-linked incentives (PLI) introduced by India in 2020 is the subject of detailed internal government reviews and must count as popular news. If it is true, Reuters The report shows that the program will not be expanded. This will represent a rapid reconsideration of a major government initiative. It quoted two senior government officials as saying the program will not be extended to its 14 pilot units and that production deadlines will not be extended despite the requirements of some participating companies.
Less emphasis on the PLI program should create space for new industrial policies. Let’s call it “nip” a sign of the speed needed to rethink several economic issues. These include India’s overvalued exchange rates, which should be measured conventionally based on the currencies of our export competitors and conclude the key bilateral trade treaties that have been delayed for years.
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this Reuters The report shows that the government needs to avoid the temptation to become a venture capitalist. To be fair, there is almost no major economy that has not taken similar efforts to choose winners and determine what is strategic. Every large economy is seeking to promote manufacturing, even if Beijing Games becomes the benefit of the global trading system. Response Reuters The government said the PLI program was successful, with participating companies already producing $163 billion worth of goods, or 90% of the year 2024-25.
However, since its inception, the PLI program appears to be a squeaking time machine that can return to the 1970s socialists in India, and we think we have stayed. In January 2021, I wrote it Mint The PLI program that evaluates company qualifications risks meeting limited licensed Raj. Given that the historical records of Indian bureaucracy date back to the 1950s, several commentators have similar opinions.
In a prophetic work by the Takshashila agency five years ago, Pranay Kotasthane noted: “PLI plans in the electronics sector have specific qualification standards for gradual investment and incremental sales that companies need to commit in the next five years,” which will be evaluated by the Electronics Management Department under the Electronics and Information Technology Department.
In turn, the recommendations will be examined by a powerful group composed of Niti Aayog and several ministry secretaries. Kotasthane observed: “The committee has the right to modify anything – simple interest rates, eligibility criteria and target segments.” He warned that “reasonable regulations tend to be over-regulated” the risk. In addition, the plan includes household appliances, food and textiles. None of these can be seen as strategic, and this task spreads beyond the capabilities of the government.
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There is now an opportunity to develop new industrial policies by making business easy to achieve real goals rather than clichés. Instead, there is currently a legal case in the Mumbai High Court where customs departments accused Volkswagen of bringing the crashed car kit and marking it as spare parts, attracting lower tax rates. These so-called malfeasance began in 2012, and the government is seeking $1.4 billion in tax deductions.
The court will decide who is wrong, but it’s hard not to know why more than a decade has been revealed in recent years. Samsung’s $601 million tax demand was revealed this week. These risks are causing international headlines when FDI India is weak.
We then had a discussion with the EU on a bilateral trade agreement, which began in 2007. Progress was reportedly very slow due to the import stalemate on European automobile and wine imports. Meanwhile, Bangladesh and other countries with priority trade arrangements have increased their share of global clothing and clothing exports.
From a work creation perspective, it would be more strategic than a textile company to quickly sign a trade agreement a few years ago. Swarajya magazine believes this week that India’s trade bureaucracy is understaffed with about 150 officials, while the U.S. trade bureaucracy has more than 150 officials.
But interventionist trade policy could have adverse outcomes, as U.S. companies and consumers will learn on April 2 as the Trump administration continues tariffs. This is another name for the statistical industrial policy.
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A tariff that favors an influential domestic company often hurts many others suffering from expensive investments. For example, India has destruction of supply chains by hundreds of quality control orders (QCOs) while reducing household competition.
These allow foreign factories to be exported to India under microscope and inspected. While QCO may be in good faith, the impact of all stakeholders must be thoroughly evaluated before application, said RP Goyal, trade adviser for Shahi Exports, India’s largest garment exporter. “Foreign suppliers are often not interested in the rigorousness of providing detailed information on the experience, conducting inspections and following annoying formalities,” Goyal said. “So, supply (drying) and manufacturing activities in India are affected.”
The author is a Mint columnist and former Financial Times foreign correspondent.
