Previous Year Question
Consider the following statements:
Statement-I: India accounts for 3.2% of the global export of goods.
Statement-II: Many local companies and some foreign companies operating in India have taken advantage of India’s ‘Production-linked Incentive’ scheme.
Which one of the following is correct in respect of the above statements?
Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I.
Both Statement-I and Statement-II are correct, but Statement-II is not the correct explanation for Statement-I.
Statement-I is correct, but Statement-II is incorrect.
Statement-I is incorrect, but Statement-II is correct.
Correct Answer: D
Detailed Solution
Statement-I is incorrect. According to the WTO Trade Profile, India’s merchandise exports in 2022 amounted to approximately US$453.4 billion, representing approximately 1.82% of total world merchandise exports, not 3.2%.
During the same period:
India ranked 18th in world merchandise exports.
Its merchandise imports were approximately US$720.4 billion.
India accounted for approximately 2.81% of world merchandise imports.
India ranked 9th in merchandise imports.
“Goods” or “merchandise” should not be combined with commercial services. India’s share in world commercial-services exports was higher than its merchandise-export share, but the statement specifically refers to global exports of goods.
Statement-II is correct. Under a Production Linked Incentive Scheme, an eligible company receives a financial incentive after meeting specified conditions linked to incremental production or incremental sales of goods manufactured in India.
PLI benefits are not restricted exclusively to Indian-owned companies. Domestic and foreign companies manufacturing in India may qualify if they satisfy the eligibility, investment and production conditions prescribed under the relevant sectoral scheme.
For example, in mobile manufacturing and electronics, both Indian companies and global companies or their contract manufacturers have received approvals under the PLI framework.
The Central Government announced PLI Schemes for 14 sectors with a total outlay of approximately ₹1.97 lakh crore. The major sectors include:
Large-scale electronics and mobile manufacturing;
Pharmaceuticals and bulk drugs;
Medical devices;
Automobiles and auto components;
Telecom products;
Advanced chemistry cell batteries;
High-efficiency solar PV modules;
White goods;
Food products;
Textiles;
Specialty steel;
Drones and drone components.
The PLI framework seeks to promote domestic manufacturing, investment, economies of scale, employment and exports while reducing import dependence.
Current status (2026)
PLI Schemes continue to be implemented through the relevant ministries across 14 sectors in 2026. Incentives are released only after companies meet scheme-specific requirements concerning actual investment, production, value addition and incremental sales.
Therefore, it would be incorrect to assume that every domestic or foreign company automatically receives the benefit. Only selected and eligible companies receive incentives after achieving the prescribed performance conditions.