Govt clears Rs 7,350 cr PLI booster for production of laptops, tablets, PCs

The government on Wednesday approved a Rs 7,350-crore scheme to boost production of laptops, tablets, all-in-one PCs and servers in the country, as it sought to woo global and domestic players to take advantage of India’s manufacturing prowess.

Production worth Rs 3.26 lakh crore and exports of Rs 2.45 lakh crore are estimated over the next four years under the new scheme, which is expected to create 1.80 lakh jobs. Briefing reporters after a meeting of the Cabinet, Communications and IT Minister Ravi Shankar Prasad said the Production Linked Incentive (PLI) scheme has been approved for IT hardware products that would cover laptops, tablets, all-in-one PCs and servers. 

The Rs 7,350-crore scheme aims to promote India as a global hub for hardware manufacturing. The PLI push for hi-tech IT hardware gadgets comes close on the heels of the Cabinet last week clearing a Rs 12,195 crore scheme for telecom equipment manufacturing. 

An incentive scheme for mobile phone manufacturing was announced last year and has since garnered strong response from players despite the challenging times of the pandemic.

The latest IT hardware scheme offers incentives between 4-1 per cent 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, an official statement said.

The scheme will benefit five major global players and 10 domestic “champions” in the field of IT hardware manufacturing, a segment where self-reliance is important for the country given the “huge import reliance” for these items at present, it added.

The PLI scheme is expected to enhance the development of electronics ecosystem in India, at a time when globally manufacturing is undergoing a shift and companies across the world are looking to diversify their manufacturing locations to mitigate the risk involved in depending on a single market. 

“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,” the statement said.

The incentives under the scheme are payable by government only after investment has been done, employment has been generated, production and sales targets have been met.

The scheme will usher additional investment in electronics manufacturing to the tune of Rs 2,700 crore. “The direct and indirect revenues generated from production under this scheme are expected to be Rs 15,760 crore over next four years. Domestic value addition for IT hardware is expected to rise to 20 – 25 per cent by 2025 from the current 5-10 per cent due to the impetus provided by the scheme,” it said. Increase in both domestic manufacturing and domestic value addition will help significantly reduce the large foreign exchange outgo that India will have to otherwise bear, it added.