Laptop, tablet makers flock to PLI version 2.0

NEW DELHI
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Leading global and domestic manufacturers have shown interest in the new production linked incentive or PLI scheme for IT hardware, said ministry of electronics and information technology secretary Alkesh Kumar Sharma.

“About 58 registrations have taken place. The response has been good. Most global and Indian players have registered,” he said on the sidelines of an event Monday.

The incentive scheme is for making laptops, tablets, personal computers, servers and edge computing devices.

The government will not extend the month-end deadline for applications, Sharma said, noting that interested players have another couple of days to submit their applications, the next step after registration.

A senior government official had told Mint earlier that Hewlett-Packard had applied under the PLI scheme. According to a source aware of the development, Dell too is learnt to have applied under the scheme, and other global players are also likely to follow suit. Queries to Dell India did not elicit a response.

This is the government’s second outing with this PLI. The first, issued in 2021 with an outlay of about 8,000 crore, received a lukewarm response with most global players staying away.

The second version, announced in May this year, has a higher outlay of 17,000 crore and contracts the company for six years , in place of four years earlier. This version appears to have been better received.

As per the IT hardware PLI 2.0 scheme, an incentive of 5% will be provided by the government on net incremental sales over the base year, for goods manufactured in India, compared to 2% earlier. The base year is FY23.

The scheme also provides for greater flexibility as the investments can be spread over six years, instead of four. Companies opting for the scheme will get additional optional incentive – of another 3% – if they use India-made and designed components, sub-system or inputs.

Also, companies can take Indian contract manufacturers on board, and avail incentives if the contractor is producing for a single company. Investments from Chinese manufacturers would be allowed in accordance with existing regulations.

The government is expecting the revised scheme to persuade multinational companies to shift their global manufacturing bases to India, leading to production worth 3.35 trillion, investments of 2,430 crore, and direct employment to 75,000 people.

Local players such as Dixon Technologies and Optiemus Electronics are widely expected to participate.

The scheme is also an attempt to foster domestic manufacturing of IT hardware products such as laptops and tablets, a significant portion of which is currently being imported for consumption.

They can either apply for the scheme themselves or can produce for an IT hardware brand under partnership and avail benefits.

Electronics manufacturing in India has witnessed consistent growth of 17% CAGR in the last eight years, he said, noting that in FY23, it crossed production of $105 billion.

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