PLI & PLI 2.0 for IT Hardware: Strong Global Response from Key Players Fuels India’s IT Export Hub Ambitions – News18

The Centre’s efforts to spice up home manufacturing and improve India’s place as a world manufacturing hub for IT {hardware} have obtained a major improve with the launch of the Production-Linked Incentive (PLI) Scheme 2.0 for IT Hardware as many corporations, together with world and home, have proven pursuits.

This scheme, which is constructed on the success of the earlier PLI scheme, comes with elevated incentives and a extra versatile method to localisation. However, in accordance with the federal government, greater than 30 corporations have utilized for the PLI Scheme for IT Hardware Manufacturing, which incorporates outstanding world corporations resembling Foxconn, HP, Dell, Lenovo, Thompson, Acer and Asus.

Union IT Minister Ashwini Vaishnaw had stated the federal government has obtained “excellent response” for the manufacturing of laptops and PCs beneath the PLI scheme. “We have met almost all the 32 companies who applied”, and the portal was closed on August 30.

Existing PLI Scheme

The Ministry of Electronics and Information Technology (MeitY) had launched the preliminary PLI Scheme for IT Hardware in March 3, 2021 to advertise home manufacturing and appeal to substantial investments within the sector. The first section had a price range allocation of Rs 7,350 crore and a four-year tenure (FY2021-22 to FY2024-25). The scheme presents about 2% incentives on internet incremental gross sales over the bottom 12 months of FY2019-20.

Under this scheme, the goal IT {hardware} segments included laptops, tablets, all-in-one private computer systems (PCs), and servers. Local manufacturing was obligatory, and corporations needed to meet funding and manufacturing thresholds to qualify for incentives. Four world corporations and 10 home corporations utilized for this scheme.

About PLI Scheme 2.0

The PLI Scheme 2.0 for IT Hardware, authorised by the Union cupboard on May 17, 2023, and notified on May 29, 2023, is ready to take India’s manufacturing capabilities and exports within the IT {hardware} sector to new heights. The price range allocation for this section stands at a staggering Rs 17,000 crore, with an prolonged tenure of six years.

Under this scheme, the typical incentive is round 5% on internet incremental gross sales of products manufactured in India. The goal section beneath PLI 2.0 consists of laptops, tablets, all-in-one PCs, servers and ultra-small kind issue (USFF). Notably, beneath this scheme, localisation is non-obligatory. However, the scheme doesn’t solely ask companies to assemble IT {hardware} objects but it surely additionally incorporates a localisation timetable to encourage the manufacturing of parts resembling printed circuit boards and reminiscence modules, for which members will probably be eligible for additional incentives.

PLI 2.0 is anticipated to draw investments of Rs 2,430 crore, leading to a complete manufacturing worth of Rs 3.35 lakh crore and producing almost 75,000 direct jobs. However, there are strict provisions in place to make sure that corporations meet their funding and manufacturing targets.

If an applicant falls in need of the incremental funding goal by a sure share, their payable PLI quantity will probably be lowered proportionally, supplied the shortfall just isn’t greater than 40%. Additionally, it was additionally said that candidates want to realize the prescribed manufacturing threshold else no incentive will probably be awarded.

“In addition, there will probably be provisions for penalties of 5% and 10% from the payable PLI quantity if the precise PLI quantity claimed for a 12 months is much less by 25%-50% and fewer by greater than 50% respectively from the estimated PLI quantity given by the applicant on the time of software,” noted an IT ministry document.

However, Under the PLI Scheme 2.0, there have been a total of 16 applicants, which includes two global companies, five hybrid entities, and nine domestic companies. This demonstrates a continued interest from both domestic and international players in India’s IT hardware manufacturing ecosystem.

Distribution Status

In a positive sign of progress, disbursements have already commenced under the initial PLI scheme for IT Hardware. Bhagwati Products Limited has received Rs 5.30 crore, and their disbursement process has been completed.

Meanwhile, Dell International Services is awaiting approval from the competent authority for their Rs 49.62 crore disbursement. Netweb Technologies, with a disbursement request of Rs 4 crore, is currently under evaluation by the Project Management Agency (PMA), M/s IFCI Ltd.

Global Hub

According to the government data and officials, India’s efforts to position itself as a trusted supply chain partner for global IT majors are gaining momentum. The country’s thriving IT services industry, coupled with strong domestic demand, is attracting large IT hardware companies to set up manufacturing facilities in India. The goal is not only to serve the domestic market but also to leverage India as an export hub.

As India continues to evolve into a manufacturing powerhouse for IT hardware, the PLI Scheme 2.0 is set to play a pivotal role in driving investments, boosting production, and creating job opportunities, further solidifying India’s status on the global technology manufacturing map.

Vaishnaw said: “Production of PCs, laptops, and servers will increase in months to come and we will see something similar or better than what has been seen in smartphone export. India is emerging as a trusted supply chain partner and value-added partner and companies are happy to come to India for manufacturing and design. The government is working on multiple ways to improve electronics manufacturing in the country.”