With demand for laptops surging due to work from home and online schooling practices, Dell Technologies India reported a record year with 64% growth in FY22. In fact, due to strong demand and local manufacturing, Dell may be the only company to meet the incremental production targets for FY22 under the production-linked incentive (PLI) scheme for IT hardware.
According to details shared by the company, Dell Technologies India grew 64% year on year in FY22, which was a record year for India business, with back-to-back record quarters. The company did not share production details or how many laptops it sold during the year. But since the firm is likely to meet production targets under the PLI scheme, the incremental sales must have been over Rs 1,000 crore.
As per the eligibility criteria of PLI scheme for IT hardware, global companies must achieve Rs 1,000 crore worth of incremental sales of manufactured goods over base year in FY22 (year one of the four-year scheme). FY20 shall be treated as the base year for computation of net incremental sales of manufactured goods. The global firms will get incentives of 4% in the first year on meeting production targets for laptops priced at Rs 30,000 or above and tablets worth over Rs 15,000. For domestic companies, there is no restriction on price of products.
“We at Dell Technologies are thankful to the government for having cleared our application and proposal to enter the PLI scheme. Our manufacturing and production are well on track to meet the initial commitments made by us,” the company told FE.
Apart from Dell, other firms selected under the PLI scheme may find it difficult to meet the output targets due to supply chain constraints in setting up new manufacturing units. Since Dell has been manufacturing in India since 2007, it has been able to scale up its capacity. The government is also considering to make the PLI scheme more attractive and revise the incentive structure. The idea is to engage in fresh consultations with the industry and offer higher incentives so that some of the bigger players, like Apple and Samsung, which have not participated in the scheme, come forward with their India manufacturing plans.
According to IDC, the market size for laptops in India was approximately 7.5 million units in 2019-20 valued at Rs 33,950 crore. Similarly, the market size for tablets was around 2.4 million units, valued at Rs 3,500 crore.