Gujarat, Tamil Nadu and Karnataka are poised to be the primary beneficiaries of the capex (capital expenditure) investments generated by the production-linked incentive (PLI) scheme, according to a report by rating agency Crisil. The three states are poised to benefit around 72 per cent of the estimated PLI capex under the 9 sectors.
The PLI scheme was initiated by Prime Minister Narendra Modi to boost local manufacturing.
According to a CRISIL Market Intelligence and Analysis (MI&A) report, “Gujarat, Tamil Nadu, and Karnataka are poised to be the primary beneficiaries of the CAPEX investments generated by the PLI (Production Linked Incentive) scheme. These states are projected to lead in reaping the scheme’s economic benefits.”
CRISIL’s report focuses on nine key sectors out of the total 14 covered by the PLI (production-linked incentive) scheme analysis. These sectors, including ACC battery, solar PV, textiles, mobile, food processing, telecom, goods, IT hardware, and medical devices are projected to collectively draw investments amounting to Rs 2.8 lakh crore nationwide.
Gujarat is set to garner a substantial share of the estimated Rs 2.8 lakh crore PLI capex in India, with investments exceeding Rs 36,000 crore. This substantial influx of PLI investments in Gujarat spans various sectors, including Rs 9,000 crore in the advanced chemistry cell (ACC) battery sector, Rs 24,000 crore in solar PV, Rs 3,000 crore in textiles, and Rs 500 crore in food processing.
In estimated PLI CAPEX, Tamil Nadu takes the lead, securing a commanding position with more than Rs 42,000 crore, representing one-third of the total. Gujarat follows closely as the second-highest recipient, claiming 28 per cent of the share, translating to over Rs 36,000 crore.
Karnataka emerges as the third contender, capturing 11 per cent with an estimated investment of Rs 14,000 crore. In stark contrast, the remaining 25 Indian states collectively share only 28 per cent, tallying up to about Rs 36,000 crore in investments across the nine key sectors under the PLI scheme.
Gujarat is set to dominate the solar PV sector’s estimated PLI CAPEX with a commanding share of over 76 per cent, totaling more than Rs 24,000 crores, while Andhra Pradesh is expected to secure the remaining 24 per cent. Among the nine sectors under review, the ACC battery sector presents the highest investment potential, reaching Rs 52,000 crore.
Tamil Nadu is poised to reap the most substantial benefits from this potential with a 67 per cent share, nearly Rs 35,000 crore, while Gujarat and Karnataka are anticipated to claim 17 per cent, amounting to nearly Rs 9,000 crore, within the ACC battery sector.
Hetal Gandhi, director of research at CRISIL MI&A, said, “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. Gujarat is poised to secure approximately 30 per cent of these investments, making it the top choice, followed closely by Tamil Nadu and Karnataka.”
He added that Gujarat’s status as an energy surplus state for two decades makes it an ideal hub for high-power-demand PLI sectors. Its advantages include low power costs, robust infrastructure logistics, and expedited approval processes, making it a top choice for PLI sector leaders looking to accelerate their growth.