Global IT hardware makers should use PLI 2.0 opportunity: Industry, ET Telecom

New Delhi: Industry associations representing IT hardware and electronics manufacturers have welcomed the revised production-linked incentive scheme for IT hardware which was approved by the union cabinet on Wednesday.

The union cabinet chaired by Prime Minister Narendra Modi approved a budgetary outlay of Rs 17,000 crore for the IT hardware PLI 2.0, up from Rs 7,350 crore in the previous version of the scheme, for a period of six years.

The government expects incremental production of Rs 3.35 lakh crore on the back of incremental investment of Rs 2,430 crore creating 75000 incremental direct jobs as a result of the scheme. Major IT hardware manufacturers such as Dell, Dixon Technologies, Bhagwati (Micromax), Flex, and others are expected to be part of the new scheme.

Addressing concerns raised by the industry amidst declining demand for PCs and laptops globally, the scheme has also made the investment criteria more flexible, extending it over a six-year period compared to four-year span, with additional optional incentives for component localisation.

“MAIT (Manufacturers Association for Information Technology) welcomes this long awaited announcement and thanks the government for bringing this much needed scheme to boost production of IT Hardware in India. We are confident that the revised Pli scheme as announced will boost manufacturing in India to both meet domestic demand and also boost export as has been achieved in the case of the Mobile phone PLI,” said Colonel Ali Akhtar Jafri, Retd., Director General, MAIT.

The industry association was part of the discussions the government had with the industry stakeholders before the scheme was approved.

The India Cellular and Electronics Association (ICEA) estimates the IT hardware industry including both global and domestic companies, catalysed by the revised scheme, is targeted to reach a production of $24 billion by 2025-26, with exports anticipated to be in the range of $12-17 billion in the same period.

“We welcome the Revised PLI for IT Hardware. It will ensure investments across the IT hardware value chain, demonstrating the government’s receptiveness to industry inputs and their determination to translate words into action. This is an opportune moment to shift IT hardware manufacturing towards India. The momentum gained by the mobile phone industry will likely create a snowballing effect on IT Hardware,” said Pankaj Mohindroo, Chairman, ICEA.

He added that India currently imports a significant portion of its laptops and tablets for consumption.

“The revised PLI scheme will not only foster domestic manufacturing but also likely benefit major global manufacturers of IT hardware products such as laptops and tablets. We urge the global industry to acknowledge this and consider India as a crucial destination for manufacturing IT hardware products,” he added.

Investments via PLI schemes top priority: Nirmala Sitharaman

India’s production-linked incentive (PLI) schemes, designed to encourage investment in the country, are being extended to new sectors including semiconductors and solar components, according to finance minister Nirmala Sitharaman. Speaking at a business conference in Tokyo, Sitharaman promoted India as an attractive location for foreign investment due to relaxed restrictions and a commitment to meeting targets for renewable energy and environmental goals.

During the announcement of the revised scheme, Union Minister of Communications, Railways, and IT, Ashwini Vaishnaw said India produced $105 billion worth of goods and over $10 billion worth of mobile phones were exported, highlighting the success of electronics manufacturing in India. He said India has become the second largest manufacturer of mobile phones in the world.

“Domestic mobile phone manufacturing has set a strong precedent of large-scale manufacturing and exports. The mobile phone export sector has achieved 100% export growth, crossing INR 90,000 crore in exports for the first time ever in FY 2022-23. We believe a similar success story will be repeated in the IT hardware sector”, Mohindroo said.

  • Published On May 17, 2023 at 04:45 PM IST

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