IT hardware PLI: Ten of 40 firms started manufacturing in July
- The government expects an incremental investment of ₹5,010 crore from 40 applicants including global IT hardware companies such as Dell and HP
New Delhi: Ten out of the 40 companies that applied for the Centre's revised production-linked incentive scheme for IT hardware have started production from 1 July 2023, while 25 plan to begin manufacturing by 1 April 2024, government officials said on Thursday.
Five companies will likely start operations from 1 April 2025.
The government expects an incremental investment of ₹5,010 crore from the 40 applicants, including global IT hardware companies such as Dell and HP that are participating directly under the revised production-linked incentive scheme.
Other major players such as HPE, Lenovo, Acer, ASUS, Thomson were participating through electronics manufacturing services providers or contract manufacturers including Flextronics and Rising Stars, a unit of Foxconn Technology Group in India.
Officials added that Indian companies such as Padget, a subsidiary of Dixon Technologies, VVDN, Netweb, Syrma, Optiemus Technologies, Sahasra, Neolync, Panache, Sojo, a unit of Lava mobiles, and Kaynes have also participated in the scheme which will get impetus from the strong IT services industry which was driving the demand within the country.
"The scheme has been oversubscribed. Against the budgetary allocation of ₹17,000 crore, applicants have projected PLI amount to the tune of ₹22,890 crore. The production figure projected by these applicants is ₹4.65 trillion - including exports of ₹28,288 crore - against the target of 3.35 trillion," the official said.
Applicants will be selected shortly as per the scheme guidelines within the overall budget outlay of ₹17,000 crore, officials added.
The six-year production-linked incentive (PLI) scheme for IT hardware—laptops, tablets, all-in-one personal computers, servers and ultra-small form factor devices—aims to attract top hardware companies.
Apple has not applied under the scheme, but one of its contract manufacturers Foxconn, under the entity Rising Stars Hi Tech, is among the 40 applicants. Government officials said they were in talks with Apple to make iPad in in the country. A few weeks ago, Hewlett Packard Enterprise said it would invest $1 billion in India to make servers.
The second version of the scheme issued in May this year appears to have been better received than the first one issued in 2021 with an outlay of about ₹8,000 crore, when most global players stayed away. According to the scheme, an incentive of 5% will be provided by the government on net incremental sales, over the base year, of goods manufactured in India, compared to 2% earlier, where the base year can be chosen starting from FY23.
The scheme also provides for flexibility as the investments can be done over six years, instead of four years earlier. Companies opting for the scheme will get additional optional incentive of another 3% if they use India-made and designed components, sub-systems, or inputs. Also, the companies can onboard Indian contract manufacturers and avail incentives if the contractors are producing for a single company. Investments from Chinese manufacturers would also be allowed in accordance with existing regulations.
"This is happy news that some of the world's largest IT companies, such as Dell, HP, ASUS, and Acer, have applied for the PLI 2.0 scheme. This shows that they are interested in manufacturing computers in India. PM Narendra Modi ji reiterated how India is the world's second-largest manufacturer of smartphones. We want to achieve the same status in IT hardware, such as laptops, servers, and tablets. The PLI scheme is part of this mission. We are happy that the scheme has been well-received by the industry. We want the big IT companies to manufacture their products in India and export them from here. This will create opportunities for jobs and investments," said minister of state for electronics and information technology Rajeev Chandrashekhar.
"The IT hardware vertical is the 2nd largest in electronics after smartphones, and a strong presence in this segment is essential for India's growth," Pankaj Mohindroo, Chairman, India Cellular and Electronics Association, said. "This will be a double engine industry — Lead firms of Global Value Chains (GVCs) and Emerging Indian champions will be the two engines of growth," he added.
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First Published:31 Aug 2023, 06:18 PM IST
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