The government on May 4, informed that a total of 19 companies have filed their application under the Production Linked Incentive Scheme (PLI) for IT Hardware. The scheme was open for filing applications till April 30, 2021. Incentives are applicable under the scheme from April 1, 2021. As per the ministry, companies like Dell, Lava, ICT (Wistron), and Rising Stars Hi-Tech (Foxconn) have applied under the PLI scheme, as reported by Mint.
The other 14 companies that have filed applications under the category Domestic Companies include Dixon, Infopower (JV of Sahasra and MiTAC), Bhagwati (Micromax), Syrma, Orbic, Neolync, Optiemus, Netweb, VVDN, Smile Electronics, Panache Digilife, HLBS, RDP Workstations, and Coconics. These companies are expected to expand their manufacturing operations in a significant manner and grow into national champion companies in IT Hardware production.
PLI Scheme for IT Hardware was notified on March 3, this year. The PLI Scheme extends an incentive of 4 percent to 2-1 percent on net incremental sales (over the base year of FY 2019-20) of goods under target segments that are manufactured in India to eligible companies, for a period of four years (FY 2021-22 to FY 2024-25), as per the Centre’s guidelines.
The target IT hardware segments under the PLI scheme include laptops, tablets, All-in-One Personal Computers (PCs) and Servers. The scheme proposes production linked incentives to boost domestic manufacturing and attract large investments in the value chain of these IT Hardware products.
According to the scheme guidelines, global companies are required to invest Rs 500 crore and achieve incremental sales of Rs 1,000 crore in the first year, Rs 2,500 crore in the second year, Rs 5,000 crore in the third year, and Rs 10,000 crore in the fourth year. For homegrown companies, the investment is kept at Rs 20 crore, while incremental sales targets are Rs 50 crore, Rs 100 crore, Rs 200 crore, and Rs 300 crore in four successive years.
In his address, Union Minister for Electronics & IT, Communications Ravi Shankar Prasad said that the PLI scheme for IT Hardware has been a huge success in terms of the applications received from global as well as domestic companies engaged in manufacturing electronics hardware products. The minister further said that “We are optimistic and looking forward to building a strong ecosystem across the value chain and integrating with the global value chains, thereby strengthening the electronics manufacturing ecosystem in the country”.
Over the next four years, the scheme is expected to lead to a total production of about ₹1,60,000 crore, according to the Centre. Out of the total production, IT Hardware companies have proposed production of over ₹1,35,000 crore, and domestic companies have proposed production of over ₹25,000 crores. Out of the total production, more than 37 percent will be contributed by exports. The scheme will bring additional investment in electronics manufacturing to the tune of ₹2,350 crores.
The Centre added that the scheme will generate approximately 37,500 direct employment opportunities along with the creation of additional indirect employment. On the other hand, Domestic Value Addition is expected to grow from the current 5-12 percent to 16-35 percent, as per the Centre.