PLI scheme to boost IT hardware manufacturing

The Rs 7,350 crore initiative will enhance development of electronics ecosystem in the country

GN Bureau | February 24, 2021


#PLI   #IT hardware   #technology   #business   #union cabinet   #AtmaNirbhar Bharat  
(Illustration: Ashish Asthana)
(Illustration: Ashish Asthana)

A production-linked incentive (PLI) scheme with a cost of Rs 7,350 crore over four years was approved by the union cabinet Wednesday, aiming to boost domestic manufacturing and attract global investment in IT hardware like laptops, tablets, PCs and servers.

The scheme extends an incentive of 4% to 2%/1% on net incremental sales (over base year 2019-20) of goods manufactured in India and covered under the target segment, to eligible companies, for a period of four years. It is likely to benefit five major global players and 10 domestic champions in the field of IT hardware manufacturing including laptops, tablets, all-in-one pcs, and servers, an official release said. “This is an important segment to promote manufacturing under AtmaNirbhar Bharat as there is huge import reliance for these items at present.”

The total cost of the proposed scheme is approximately Rs.7,350 crore over four years, which includes an incentive outlay of Rs.7,325 crore and administrative charges of Rs.25 crore.

The scheme will enhance the development of electronics ecosystem in the country. India will be well positioned as a global hub for Electronics System Design and Manufacturing (ESDM) on account of integration with global value chains, thereby becoming a destination for IT Hardware exports. It has a potential to generate over 1,80,000 direct and indirect jobs over four years.

It will provide impetus to Domestic Value Addition for IT Hardware which is expected to rise to 20%-25% by 2025.

The vision of National Policy on Electronics 2019 notified on February 25, 2019 is to position India as a global hub for ESDM by encouraging and driving capabilities in the country for developing core components, including chipsets, and creating an enabling environment for the industry to compete globally.

Currently, the laptop and tablet demand in India is largely met through imports valued at USD 4.21 billion and USD 0.41 billion respectively in 2019-20. The market for IT Hardware is dominated by 6-7 companies globally which account for about 70% of the world's market share. These companies are able to exploit large economies of scale to compete in global markets. It is imperative that these companies expand their operations in India and make it a major destination for manufacturing of IT Hardware.

Given the current global scenario, the world of manufacturing is undergoing a paradigm shift. Manufacturing companies across the globe are looking to diversify their manufacturing locations to mitigate the risk involved in depending on a single market.

Last year, a similar PLI scheme for mobile phones and specified electronic components was launched amid the pandemic to establish India as a hub of electronic manufacturing. It has been a huge success in terms of interest received from global as well as domestic mobile manufacturing companies. Sixteen companies were approved under the first round of the PLI Scheme for large scale manufacturing of mobile phones and specified electronic components.

Based on initial success of the PLI Scheme for mobile phones and specified electronic components, 10 target sectors along with specific product lines having high growth potential were identified by NITI Aayog for implementation of PLI Schemes. The one for IT Hardware is a further step in that direction. It comes in close wake of a PLI Scheme for Telecom and Networking Products that was approved by Union Cabinet last week.

 

Comments

 

Other News

Revamp BMC Engineering Department for better governance, says think tank

Calling for reforms in the Engineering Department of BMC, Mumbai Vikas Samiti, a not-for-profit organisation has said that less than optimum performance of Engineering Function has added to the woes of citizens and deterioration in the quality of life in the metro. In its recently released r

NGO hails Maharashtra move to amend Insecticide Act

Hailing the Maharashtra government for introducing a bill to amend the Insecticide Act, 1968, Pesticide Action Network (PAN) India has called the amendments ‘very  focussed’ and urged the state to expand their scope to address other challenges. The bill, introduced in the a

‘Garba of Gujarat’, now a Unesco Intangible Cultural Heritage

`Garba of Gujarat` has been inscribed in the Representative List of Intangible Cultural Heritage (ICH) of Humanity by UNESCO, under the provisions of the 2003 Convention for the Safeguarding of Intangible Cultural Heritage during the 18th meeting of the Intergovernmental Committee for the Safeguarding of t

Cyber frauds helpline has helped save Rs 930 crore

Since its inception, Citizen Financial Cyber Fraud Reporting and Management System has witnessed more than 12.77 lakh complaints registered (till November 15, 2023), and has saved more than Rs. 930 crore in more than 3.80 lakh complaints. This was stated by minister of state for home affair

COP28 discusses climate resilient development in Himalayas

Impacts and implications of Climate Change Vulnerability in the Himalayan Region and ways of creating ‘Climate Resilient Development in Indian Himalayan Region by making mountain communities green and resilient were discussed the side event hosted at the India pavilion at the UN Climate Conference CO

Air Pollution: What needs to be done to tame the silent killer

Air pollution in Delhi has been in headlines, as every year in recent times. Mumbai too has suffered from air pollution, despite being a coastal city. Apart from many other metros such as Bangalore and Kolkata, tier-I and -II cities and rural areas also have high pollution levels. Every year reports and st

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter