The future of India’s much-touted Production-Linked Incentive (PLI) scheme is in serious doubt. Despite grand ambitions, the scheme has failed to halt—let alone reverse—the decline in Indian manufacturing. Proponents of the scheme give it credit for recent success in electronics manufacturing, where India has become one of the world’s largest smartphone producers. Acknowledging the scheme’s issues, they ask for it not to be killed but rebooted as PLI 2.0 (or was it 3.0?).

China and Vietnam both have substantially lower green cover requirements – between 0 and 10%. It is no coincidence that India has barely any factories with more than 10,000 workers, whereas mega-factories with workforces of 100,000 to 200,000 are common in China and Vietnam.