By Dominick Rodrigues
Mumbai : As many as 19 electronics hardware manufacturing companies have filed applications under the Production Linked Incentive Scheme (PLI) for IT Hardware, which was notified on March 3, 2021. These companies expect to expand manufacturing operations significantly for growing into national champion companies in IT Hardware production.
The 19 companies include: Dell, ICT (Wistron), Flextronics, Rising Stars Hi-Tech (Foxconn) and Lava. About 14 companies have filed applications under the category Domestic Companies and 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.
Over the next 4 years, the Scheme is expected to lead to total production of about Rs 1,60,000 crore — in which IT Hardware companies have proposed a production of over Rs 1,35,000 crore, and Domestic Companies have proposed a production of over Rs 25,000 crore.
Out of the total production of Rs 1,60,000 crore in the next 4 years, over 37% will comprise exports of Rs 60,000 crore. Besides drawing additional investment in electronics manufacturing to the tune of Rs 2,350 crore, the scheme will generate approximately 37,500 direct employment opportunities in next 4 years along with creation of additional indirect employment of nearly 3 times the direct employment. Domestic Value Addition is expected to grow from the current 5-12% to 16-35%.
Speaking after the conclusion of application window under the scheme, Ravi Shankar Prasad, Union Minister for Electronics & IT, Communications, Law and Justice described the PLI scheme for IT Hardware as a huge success in terms of the applications received from Global as well as Domestic companies engaged in manufacturing electronics hardware products.
“Industry has reposed its faith in India’s stellar progress as a world class manufacturing destination and this resonates strongly with Prime Minister’s clarion call of AtmaNirbhar Bharat – a self-reliant India,” the Minister said, adding “We are optimistically looking forward to building a strong ecosystem across the value chain and integrating with the global value chains, thereby strengthening electronics manufacturing ecosystem in the country”.
The Production Linked Incentive Scheme (PLI) for IT Hardware was notified on 03.03.2021. The PLI Scheme extends an incentive of 4% to 2%/ 1% on net incremental sales (over 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).
India has witnessed an unprecedented growth in electronics manufacturing in the last five years and the National Policy on Electronics 2019 envisions positioning India as a global hub for Electronics System Design and Manufacturing (ESDM) by focusing on size and scale, promoting exports and enhancing domestic value addition by creating an enabling environment for the industry to compete globally.
After the success of the Production-Linked Incentive Scheme in drawing investments in mobile phone (handsets and components) manufacturing, the Union Cabinet chaired by the Prime Minister Narendra Modi approved the Production Linked Incentive (PLI) Scheme for IT hardware products. The target IT hardware segments under the proposed 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.
With the demand for electronics in India expected to grow manifold by 2025, the Union Minister expressed confidence that the PLI scheme and other initiatives to promote electronics manufacturing will help in making India a competitive destination for electronics manufacturing and give boost to AtmaNirbhar Bharat. Creation of domestic champion companies in electronics manufacturing under the Scheme will give fillip to vocal for local while aiming for global scale, he added.
