Mumbai, Nov 12 (PTI) The apex engineering exporters' body EEPC on Thursday sought extension of the production-linked incentive (PLI) scheme to MSMEs on an incremental basis given their role in both manufacturing as well as exports.

The PLI scheme should be extended on an incremental basis to the MSMEs given the fact that the sector contributes 45 per cent to the manufacturing output and 40 per cent to exports, Engineering Export Promotion Council (EEPC) of India Chairman Mahesh Desai said in a statement.

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MSMEs in the engineering sector play a vital role with strong backward and forward linkages and with significant value addition and employment generation.

"It is, therefore, important to provide the benefits to PLI scheme to MSMEs on an incremental basis so that they can move on production value chains to compete in world markets," Desai said.

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He further said overall the new scheme approved by the Cabinet will give an impetus to the manufacturing sector by strengthening production capabilities of manufacturers, thereby making domestic industry competitive to participate in global value chains.

Engineering exporters account for over a quarter of the country's total merchandise exports.

The Cabinet on Wednesday approved PLI for 10 more sectors, including auto and pharmaceuticals, with an outlay of about Rs 1,45,980 crore over a period of five years. Under another PLI scheme, an outlay of Rs 51,311 crore has already been approved.

The PLI scheme aims to take the share of the manufacturing sector in the GDP to USD 1 trillion by 2025 by significantly reducing cost of manufacturing and encouraging global firms to invest in the country.

The scheme also aims at helping domestic manufacturers scale up their production to reduce excessive reliance on imports by achieving better economies of scale to become export competitive.

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