The government has so far received registration from 58 companies for the Rs 17,000-crore IT hardware production-linked incentive (PLI) scheme, Alkesh Kumar Sharma, secretary at the Ministry of Electronics and Information Technology, said on Monday. Of the 58 registrations, two companies, including HP, have actually submitted their applications, sources in the know said.
The deadline for submitting applications under the scheme is August 30. Companies such as Dell, ICT Service (Wistron), Lava, Dixon, Rising Stars Hi-Tech (Foxconn), Netweb Technologies and Optiemus Electronics, among others, who were part of the first phase of IT hardware PLI, are expected to migrate to the new scheme, officials said.
Speaking to reporters on the sidelines of an event organised by the India Cellular and Electronics Association (ICEA), Sharma said the response to the PLI Scheme 2.0 for IT hardware has been better than expected and the government has received registrations from global firms as well. Sharma said the government does not intend to extend the deadline for receiving applications.
Through the IT hardware PLI scheme, the government aims to push local manufacturing of IT hardware such as laptops, tablets, desktops, and servers. In May, the government had revised the IT hardware PLI scheme by increasing the outlay to over two times to Rs 17,000 crore.
Interest from both the global as well as domestic IT companies also indicate their strong intent of manufacturing in India, especially at a time when the import curbs on laptops, personal computers (PCs), servers, and related items will kick in from November 1.
In a meeting earlier this month, IT ministry officials have told major companies to expedite their Make in India plans and apply under the IT Hardware PLI scheme.
In the revised scheme, the government increased the duration to six years with a provision to claim incentives in any of the six years, increased the incentive 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.
With the revised scheme, the government expects the incremental production worth Rs 3.35 trillion and expects incremental direct employment generation for 75,000 people. Including indirect jobs, the scheme could provide employment to 200,000 persons.
Electronics manufacturing in India has witnessed a 17% compounded annual growth rate (CAGR) in the last eight years.
The government is targeting $300 billion worth of electronics production by 2025-26, 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.
The first version of the scheme, launched in March 2021 with an outlay of Rs 7,350 crore, received a lukewarm response. Only three companies – Dell, Bhagwati and Dixon – were able to meet FY22 targets. Of the projected investments of Rs 2,500 crore, only Rs 123-crore investments were received.
