India Scraps $23 Billion Manufacturing Initiative Amid Manufacturing Hurdles

India's $23 billion Production-Linked Initiative, aimed at boosting domestic manufacturing, will expire without extension, ending hopes to enhance manufacturing to 25% of GDP by 2025. Various sectors, including pharmaceuticals, saw growth, but lagging payouts and unmet targets hindered its effectiveness, prompting alternative strategies.

In a significant policy shift, the Indian government, led by Prime Minister Narendra Modi, is letting a $23 billion program aimed at boosting domestic manufacturing expire, according to sources within the administration.

The Production-Linked Initiative, launched four years ago to lure firms away from China, will cease as planned, affecting 14 pilot sectors without extending deadlines, despite requests from participating firms.

Apple supplier Foxconn and Indian conglomerate Reliance Industries were among the 750 companies involved. The program's failure to meet its ambitious goals marks a blow to India's manufacturing aspirations, as the sector's economic contribution dropped from 15.4% to 14.3% of GDP.

(With inputs from agencies.)