India's PLI schemes meet 76% investment target but create just 28% of promised jobs

India's ambitious push to expand domestic manufacturing through production-linked incentives (PLI) is struggling to deliver on one of its key promises: job creation, with the programme achieving just 28% of its employment target despite making considerably more progress on investment and production.

The PLI schemes, rolled out across 14 sectors ranging from mobile phones and textiles to automobile components, have achieved 76% of their investment target and 64% of their production goal, according to an assessment by government think tank NITI Aayog. The employment achievement, however, stands at just 28% of the target, even as the schemes have crossed the halfway mark of their combined implementation period.

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The findings highlight a key challenge facing Prime Minister Narendra Modi's manufacturing ambitions: translating investments in factories and production capacity into jobs for India's large and growing workforce.

The government has committed billions of dollars in incentives to attract manufacturers, strengthen domestic supply chains and position India as a global manufacturing hub. The programme has drawn investments from companies such as Apple and Samsung, helped boost exports and expanded the country's manufacturing footprint. However, employment generation has lagged behind the progress made in investment and output.

NITI Aayog has cautioned against viewing the gap in employment targets as evidence of the programme's failure. The think tank said investments and production generally precede hiring, which could accelerate as manufacturing facilities become fully operational.

With 42% of the schemes' combined implementation period still remaining, employment generation has time to catch up, it said.

The assessment, conducted roughly midway through the programme's implementation, also called for closer scrutiny of schemes that have achieved less than half of their respective targets.

The employment gap assumes significance as India grapples with the challenge of creating enough jobs for its young population. Despite being among the world's fastest-growing major economies, the country continues to report elevated unemployment among young people, with concerns over employment opportunities and education triggering street protests this year.

Official data put unemployment among people aged 15-29 at around 10% in 2025. However, independent research suggests that the jobs challenge could be considerably more severe among young people with higher education.

Azim Premji University's estimates show that nearly 40% of graduates aged 15-25 are unemployed. The proportion stands at around one-fifth among those aged 25-29.

The findings underline the gap between India's efforts to attract manufacturing investments and the larger challenge of ensuring that industrial expansion translates into meaningful employment.

With inputs from Bloomberg