Government grants incentives for Dell, HP, Foxconn to make IT hardware locally

Information technology minister Ashwini Vaishnaw said the companies are expected to invest 30 billion Indian rupees ($360 million) collectively, while creating 50,000 jobs in the sector.

Approvals have also been granted to domestic manufacturers including Dixon Technologies and VVDN, the minister said.

The government had in May doubled the value of the incentive scheme to spur domestic production of laptops and tablets, following a lukewarm response to a previous programme.

The country is offering cash-backs to manufacturers on sales of locally made goods that exceed an annual target.

The scheme is key to India’s ambitions to become a powerhouse in the global electronics supply chain, with the country targeting an annual output worth $300 billion by 2026.

The move comes at a time when India is wooing IT hardware players with policy sweeteners and incentive schemes, making a determined push to position itself as a global hub for hi-tech manufacturing.

“I am happy to announce that 27 companies have been approved under the PLI IT hardware scheme. About 95 per cent of these…23 companies are ready to start manufacturing from day-zero,” Minister for Electronics and IT Ashwini Vaishnaw said.

“This will set us up for being a big force in manufacturing of PCs, servers, laptops, and tablets,” he added.

These 27 companies will invest 3,000 crore. Big players, including Dell, Foxconn, and HP, are among the companies whose applications have been approved.

Vaishnaw said, “As you’re aware, a few months back, PM Modi approved the Production Linked Incentive Scheme (PLI) scheme for IT hardware. And within the very short time frame, I’m very happy to announce that 27 companies have been approved for the PLI.”

During a press conference, Vaishnaw highlighted that nearly 95 per cent of these approved companies, totalling 23, are ready to commence immediate manufacturing.

Vaishaw said, “The best part is almost 95 per cent of these, the exact number is 23 out of these are ready to start their manufacturing on day 0. And about 4 companies will start their manufacturing within 90 days”.

Minister added, “These 27 applications will lead to about investment of 3 thousand crores additional production amount 3 lacs 50 thousand crores and direct employment of about 50 thousand and indirect employment about a lac and 50 thousand. So total employment about 2 lac will be created. The value chain is shifting to India”.

The remaining four companies are expected to initiate manufacturing within the next 90 days. The approved applications are projected to result in an additional investment of 3,000 crores, with an overall production value of 3.5 lakh crores.

The direct employment generated is estimated at around 50,000, while indirect employment opportunities will reach approximately 1.5 lakh, contributing to a total employment boost of 2 lakh.

Vaishnaw mentioned 27 companies that have received the PLI approval include Dell, Foxconn, HP, Flextronics, Padget, Lenovo, New Link, Zenus, Mega and Optimus, signalling a significant shift in the value chain toward India.

The PLI Scheme for IT Hardware, introduced by Prime Minister Narendra Modi and notified on May 29, 2023, with a budgetary outlay of 17,000 crores, aims to enhance the IT hardware manufacturing ecosystem in the country.

The scheme is anticipated to stimulate local manufacturing, encouraging the localization of components and sub-assemblies and fostering the development of a robust supply chain within India.

Ashwini Vaishnaw previously reported an outstanding response to the PLI scheme for laptops and PCs, with 32 applications received, including major players like HP India, Dell, Acer, Lenovo, and Thomson.

The scheme is poised to bring expected incremental production of 3,35,000 crores, an incremental investment of 2,430 crores, and an anticipated direct employment boost of 75,000.

The PLI schemes, a part of India’s Atmanirbhar and ‘Make-in-India’ initiatives, aim to enhance global competitiveness, attract investments, boost exports, integrate India into the global supply chain, and reduce dependency on imports across various sectors.

 

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Updated: 18 Nov 2023, 04:33 PM IST

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