PLI scheme 2.0 in IT hardware: 23 firms ready, 4 to start production in 90 days

A total of 27 companies, including Acer, Asus, Dell, HP, and Lenovo, have joined the Modi government's ‘Make in India’ programme under the Production Linked Incentive (PLI) scheme for manufacturing laptops, PCs, tablets and servers, Union Minister for Electronics & Information Technology Ashwini Vaishnaw said.

As per the minister, "23 out of 27 approved applicants are ready to start manufacturing on day zero". About four companies will initiate their production in the next 90 days. The U.S.-based smartphone giant Apple, however, has given a miss to the Centre’s incentive plan.

This scheme that covers laptops, tablets, all-in-one PCs, servers and ultra-small form factor devices is expected to generate two lakh jobs, of which about 50,000 are likely to be direct over the tenure of the scheme.

The Centre also expects total investment by companies at ₹3,000 crore and the value of IT hardware to be at ₹3,50,000.

"Happy that the industry is moving at the pace at which PM Modi wants the country to move," the minister adds.

In August, Vaishnaw had said 38 companies had applied for manufacturing laptops, PCs and servers in India under the PLI 2.0 Scheme for IT hardware.

The scheme, as per the Union minister, is going to make a huge difference just like mobile phone manufacturing increased multi-fold after the PLI, and India became a big manufacturer and exporter of mobile phones. In the same way, India will become a big manufacturer and exporter of PCs, laptops, and servers, he said.

The applications for the PLI scheme closed on August 30, 2023. "There will be a lot of value addition, which will be between 30 and 48%, and once the semiconductor manufacturing also starts, it'll go up to 75%."

The incentive per company will be applicable on net incremental sales of manufactured goods (covered under the target segment) over the base year, subject to a ceiling of ₹4,500 crore for global companies, ₹2,250 crore for hybrid (global/domestic) companies and ₹500 crore for domestic companies.

The scheme approved in May is expected to contribute significantly to achieving electronics manufacturing turnover of around $300 billion by 2025-26. The PLI scheme was announced after India became the world's second-largest manufacturer of mobile phones. Exports of mobile phones crossed a major milestone of $11 billion this year (₹90,000 crore) this year.

According to India Ratings and Research (Ind-Ra), FDI in computer hardware and software increased to $72.7 billion from April 2014 to March 2022 from just $12.8 billion from April 2000 to March 2014. The domestic production of electronic goods has increased substantially from ₹3,17,331 crore in 2016-17 to ₹6,40,810 crore in 2021-22, growing at a compound annual growth rate (CAGR) of 15%.