The Indian government‘s announcement of approvals for Production Linked Incentive (PLI) schemes in the IT hardware sector signals a significant stride in boosting domestic manufacturing. Ashwini Vaishnaw, Minister for Electronics and Information, revealed that 27 companies have secured approval.
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Vaishnaw highlighted that 23 of these endorsed companies are poised to commence manufacturing operations immediately, while an additional four will initiate within the next 90 days. This development is projected to inject a staggering Rs 3,000 crore into the industry, resulting in direct employment for 50,000 individuals and indirect opportunities for 150,000 more.
Earlier, a pool of 40 companies, including industry giants Dell, HP, and Lenovo, had applied for the IT hardware PLI scheme. Their commitment involves the production of personal computers, laptops, tablets, servers, and assorted equipment valued at Rs 4.65 lakh crore during the scheme’s tenure.
Among the approved entities are familiar names such as Dell, Foxconn, HP, Lenovo Flextronics, VVDL, Neolink, Bhagwati, Netweb, Sahasra, ILP, and Optimus, signalling a diverse consortium of manufacturers entering this transformative phase.
Vaishnaw also reassured that companies not yet approved are actively assessing the scheme and are expected to join the initiative soon.
The genesis of this colossal step dates back to May when the Cabinet sanctioned a revamped IT hardware PLI scheme worth Rs 17,000 crore. Spanning six years, this initiative targets the augmentation of domestic manufacturing in laptops, tablets, all-in-one PCs, servers, and ultra-small form factor devices.
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It is anticipated to trigger an incremental production worth Rs 3.35 lakh crore and create around 200,000 job opportunities.
Contrasting the previous scheme, which offered incentives of up to 2 percent of net sales for domestically manufactured goods, the revised version substantially elevates the basic incentive to over 5 percent.
Moreover, the revamped scheme aims to catalyse local manufacturing of smaller components in computing devices. It does so by introducing additional incentives, reaching up to 3 percent, for companies procuring domestically-produced components like memory chips, printed circuit board assemblies, solid-state drives, chassis, power supply components, and adaptors.
According to the Ministry of Electronics and Information Technology (MeitY), the industry grapples with challenges, experiencing a setback of approximately 8.5% to 11% due to inadequate infrastructure, domestic supply chain and logistics, high financial costs, power quality limitations, limited industry focus on research and development, and skill development gaps.
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The overarching goal of the National Policy on Electronics 2019 (NPE 2019) is to establish India as a paramount hub for Electronics System Design and Manufacturing (ESDM). This vision seeks to foster indigenous capabilities in developing core components, aiming to create a conducive environment that empowers the industry to compete fiercely on the global stage.
