The government has approved applications of 27 companies such as Dell, HP, Lenovo, Foxconn, among others, out of the 40 proposals it received under the Rs 17,000-crore IT hardware production-linked incentive scheme, communications and IT Minister Ashwini Vaishnaw said on Saturday.
The companies will manufacture laptops, servers, and personal computers (PCs) as part of the scheme and will collectively invest Rs 3,000 crore.
“23 out of these companies are ready to start manufacturing on day zero. And four companies will start their production within next 90 days,” Vaishnaw said. The companies approved will lead to additional production worth Rs 3.5 trillion and generate direct employment of 50,000, and indirect employment of 150,000, the minister added.
Other companies whose applications have been approved are Flextronics, Padget, Sojo, VVDN, Goodworth, Neolink, Syrma, Bhagwati, Optiemus, Neolync Tele Communications, Netweb Technologies, Sahasra Electronic, Smile Electronics, ITI, Sancraft, Riot Labz, Kaynes Electronics, etc.
Notably, based on the proposals received, the government had projected an incremental investment of Rs 5,010 crore.
“We have a very transparent and objective evaluation mechanism. The companies which have got evaluated by that process have passed the rigour that is required, only those are approved first,” Vaishnaw said. Many of the companies already have the investments done, which is part of the PLI 1.0 or their own initiatives so this (Rs 3,000 crore) is the incremental investment,” Vaishnaw added.
On the government’s plan to bring component manufacturing as well in India, Vaishnaw said, “the way component manufacturing is coming to India – it’s a very natural pull which is happening. As these companies get established, they scale up, many of the complex sub-assemblies are the ones that are coming first”.
Electronics industry association MAIT said the scheme will help diminish dependence on IT hardware imports and encourage localisation of components. “With unwavering confidence, we anticipate India’s ascent to a leadership position in the manufacturing and export of products such as laptops, tablets, servers, and USSF (ultra-small form factors), mirroring the transformative success witnessed in the Indian mobile phone industry,” said Suhail Zaidi, director general of MAIT.
The government is targeting $300 billion worth of electronics production in the country by 2025-26, out of which $120 billion is expected to be exported. Of the total target, IT hardware (laptops, tablets, personal desktops and servers) is expected to contribute $25 billion whereas the IT hardware exports are estimated to reach $12-17 billion by 2025-26.
Vaishnaw said the government is progressing rapidly to meet the $300 billion electronic production target. Currently, the domestic electronic production stands at $105 billion.
The first version of the IT Hardware PLI scheme, launched in March 2021 with an outlay of Rs 7,350 crore, had received a lukewarm response from the companies. Of the projected investments of Rs 2,500 crore, only Rs 123 crore-worth investments were received. In the revised scheme, the government increased the duration of the scheme to six years with a provision to claim incentives in any of the six years, increased the incentive of the scheme to 5% from 2%, made investments flexible, allowed companies to even include investments made by their suppliers or contract manufacturers, and made provision for additional incentives of 3-4% if the companies use locally manufactured components.