Global hardware firms intensify talks with local cos on PLI, ET Telecom

New Delhi: Top global technology hardware brands have intensified talks with local companies that applied for the revised production-linked incentive (PLI) scheme to set up an ecosystem for making notebooks, desktops, and servers in India – and helping achieve the federal goal of 70% local output in three years for these items.

“We have partnered with local OEMs (original equipment manufacturers) and already have a small-scale facility where we manufacture some of our products in India,” said Arnold Su, Vice President, Consumer and Gaming PC, System Business Group, ASUS India.

Su added that Asus is constantly collaborating with the Indian administration to set up a manufacturing facility in Chennai. “Starting December this year, all our manufacturing operations will be consolidated in this new state-of-the-art factory,” he said.

Industry executives said Asus is collaborating with US-based Flextronics Technologies, which has applied for the revised PLI scheme. The contract manufacturer currently makes products for HP.

Similarly, Taiwan-based Acer said it is currently in an advanced phase to enhance its manufacturing presence within the country. “Our dedication to local manufacturing is not recent, it has been a consistent aspect of our long-term strategy, and we have ambitious intentions to significantly expand these ambitions,” said Sudhir Goel, chief business officer, Acer India.

Acer said it started manufacturing in India in 2021, and has successfully produced a substantial number of PCs in the country including laptops. The company has roped in Dixon Technologies for local production under the first version of the PLI scheme with a capacity of producing 5 lakh laptops annually at its facility in Noida.

Earlier, ET reported that HP and Lenovo are also in talks with Dixon to ramp up local production. Both companies already have a manufacturing presence in India.

HP, Lenovo

While HP works with Flex to produce IT hardware for consumers and businesses, Lenovo has a plant in Puducherry with three flexible assembly lines to make its full consumer and commercial range. It also has a plant in partnership with Wingtech in Tirupati to make tablets in India.

The development comes amidst the union cabinet approving the revised PLI scheme for the segment, with a financial outlay of Rs 17,000 crore. The government said it has received 40 proposals worth Rs 22,890 crore, far outstripping the budgetary layout of the scheme. The government is yet to release the final list of participants under the scheme.

In a move that could push the PLI scheme which is expected to incentivise local manufacturing, the government in August imposed restrictions on import of IT hardware from November, with companies requiring a licence to import products from abroad. However, the government has now learnt to have called off plans to impose a licensing regime, and instead will look to regulate inbound shipments through an import management system.

The system will be used to grant quotas to firms based on parameters such as import value of previous year, domestic manufacturing of IT hardware products, and exports of electronics goods, ET reported last week.

That said, despite the majority of current consumption being served through imports, executives in IT hardware companies said there will be no disruption in supply during the upcoming festive season where they expect a slight uptick in sales at a time when demand for IT hardware is seen to be declining year-on-year.

An industry executive said forecasts for the festive season are done by June-July and consignments usually take around 45 days to arrive at ports. “Most companies will already have ensured adequate inventory for the festive season,” the executive said.

Acer

“As per clarifications issued by the government, there will be no disruption and we are confident that business will continue as usual,” Acer’s Goel said, adding that he anticipates substantial double-digit growth during the festive season and plans to boost its market share by 5-6 percentage points.

Asus’ Su also does not expect any disruption due to the uncertainty around imports.

“With our robust supply chain network, we were able to efficiently handle any potential operational challenge that may have arisen with uncertainty during the initial phase of the curb announcement. However, we have not experienced any disruption,” he said.

He added that Asus is poised for further growth during the festive season after achieving 18% market share in the consumer PC market according to IDC India.

“Looking ahead to the festive season, we are poised for further growth and expect a 5-10 per cent surge in sales compared to the previous year,” Su said, adding that the company sees India as one of the strategic and most aggressively growing markets with substantial untapped potential compared to other countries.

  • Published On Sep 25, 2023 at 08:26 AM IST

Join the community of 2M+ industry professionals

Subscribe to our newsletter to get latest insights & analysis.

Download ETTelecom App

  • Get Realtime updates
  • Save your favourite articles


Scan to download App


link

Leave a Reply

Your email address will not be published. Required fields are marked *