The Government of India has approved the Production Linked Incentive (PLI) Scheme for IT Hardware.
The scheme proposes production-linked incentives to boost domestic manufacturing and attract large investments in the value chain of IT Hardware.
The Target Segments under the proposed Scheme include Laptops, Tablets, All-in-One PCs, and Servers. The Scheme is expected to extend an incentive of 4 percent to 2 percent / 1 percent on net incremental sales (over base year i.e. 2019-20) of goods manufactured in India and covered under the target segment, to eligible companies, for a period of four years, the government said.
Further, the scheme is likely to benefit five major global players and ten domestic champions in the field of IT Hardware manufacturing including Laptops, Tablets, All-in-One PCs, and Servers. This is an important segment to promote manufacturing under the AtmaNirbhar Bharat initiative as there is a huge import reliance on these items at present.
The scheme will also enhance the development of the electronics ecosystem in the country. India will be well-positioned as a global hub for Electronics System Design and Manufacturing (ESDM) on account of integration with global value chains, thereby becoming a destination for IT Hardware exports.
The scheme has an employment generation potential of over 1,80,000 (direct and indirect) over 4 years. The Scheme will provide impetus to Domestic Value Addition for IT Hardware which is expected to rise to 20 percent – 25 percent by 2025, the government added.
The vision of National Policy on Electronics 2019 is to position India as a global hub for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components, including chipsets, and creating an enabling environment for the industry to compete globally.
The government further pointed out that currently, the laptop and tablet demand in India is largely met through imports valued at USD 4.21 billion and USD 0.41 billion respectively in 2019-20.
The market for IT Hardware is dominated by 6- 7 companies globally which account for about 70 percent of the world’s market share. These companies are able to exploit large economies of scale to compete in global markets. Given the current global scenario, the world of manufacturing is undergoing a paradigm shift.
Manufacturing companies across the globe are looking to diversify their manufacturing locations to mitigate the risk involved in depending on a single market.