38 companies applied under PLI scheme for IT hardware to manufacture laptops, tablets: Vaishnaw

Union IT Minister Ashwini Vaishnaw said the government has got ‘amazing’ response from all top global makers under its production-linked incentive (PLI) 2.0 scheme for hardware.

The government got 40 applications from top players, including HP, Dell, Asus, Acer, Lenovo, among others. These companies will now beef up production in the country — directly or through domestic manufacturers and suppliers. 

One of the most important things as far as the common man is concerned about this scheme is that as global players beef up production in India, cost of these items will become cheaper as cost of production will come down. 

The PLI outlay now is Rs 22,880 crore as against Rs 17,000 crore outlay earlier, said Vaishnaw. 

According to government sources, Apple Inc too has shown interest and there is a possibility of the company manufacturing in India in near future.

Speaking with media on Wednesday, Vaishnaw said, “We have received an excellent response for the production of laptops and PCs under the IT hardware PLI scheme. we are expecting fresh investments of around Rs 2,430 crore. The expected direct employment is going to be around 75,000. Now, one direct employment leads to three indirect employments, so overall this will not just boost GDP but also lead to job creation.”

Currently, of the total laptop needs of India, 75% of needs are met through Hong Kong,  Singapore and China. 

The government will provide 5% incentive to brands on fresh local production of these IT products, said Vaishnaw.

Vaishnaw told India Today, “Like the semi-conductor industry, this PLI will pave way for long term economic gains for the country. The impact will be many folds – job opportunities, increase in GDP, cheaper goods, India to become expert hub. Once companies start production in India, very soon export of products will also begin.”

By April 2024, companies are likely to begin manufacturing.

“We are likely to see expected incremental production of Rs 3.35 lakh crore. The expected direct employment is going to be 75,000. This is beginning of competent production in India,” he added. Production Linked Incentive (PLI) Scheme 2.0 for IT Hardware was notified on May 29, 2023, with a budgetary outlay of Rs 17,000 crore. The Union Cabinet, chaired by Prime Minister Narendra Modi, gave the approval for the scheme.

The PLI scheme 2.0 for IT hardware scheme will allow applicants to choose 2023, 2024 or 2025 as the base year for starting production and envisages an incentive of up to 5% on incremental sales, more than double the roughly 2% being offered under the first phase.

As part of its AatmaNirbhar and Make in India plan, the government launched PLI schemes in varied sectors to make Indian manufacturers globally competitive, attract investments, enhance exports, integrate India into the global supply chain and reduce dependency on imports.

The government is now pushing to position India as a strong global manufacturing hub, a feat that has been achieved by countries like Vietnam, China, Bangladesh. 

“In the global supply chain India will make a mark, it has been Prime Minister’s vision to make India a manufacturing hub and our policies are formed to realise this vision,” Vaishnaw added. 

The IT minister also emphasised on the fact that in his interactions with companies none of the IT hardware companies expressed concerns about the new import licensing policy.

There have been many like former governor of the Reserve Bank of India, Raghuram Rajan, who have spoken against enormous fiscal allocations for smartphone and hardware PLI schemes.

Raghuram Rajan has argued that the thousands of crores of rupees that have been allocated to PLI schemes don’t justify low job generation and minimal value addition.

However, data suggests this could be beginning of a new era for Indian manufacturing. 

“There are many people who don’t want ‘Make in India,’ including our good friend Raghuram Rajan… Local value addition can be anywhere between 35% to 48%. Forget what Raghuram is saying, it (increase in local value addition) happens naturally,” Vaishnaw told reporters on August 30.