India Entry & Business Startup Consultings

Project Linked Incentive Scheme

Introduction:

After the success of the Production Linked Incentive Scheme in bringing investments in mobile phone (handsets and components) manufacturing, the Union Cabinet on 24 February 2021 has 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 aims to boost domestic manufacturing and attract large investments in the cycle of IT Hardware products.
Since the announcement of this scheme in April 2020, companies including top global mobile phone manufacturers, have manufactured goods worth ~INR 35,000 crore and invested ~INR 1,300 crore under this Scheme. Employment generation stands at around 22,000 jobs.
After the first stage 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.
The proposed scheme is likely to benefit major manufacturers of IT hardware products namely Laptops, Tablets, All-in-One PCs, and Servers. 

Benefits:

This scheme aims to develop an electronics ecosystem in the country, thereby making India a well-positioned global hub for Electronics System Design and Manufacturing (ESDM). 

  • The next 4 years would enable the Scheme to lead towards total production of ~INR 3,26,000 crore (INR 3.26 lakh crore).
  • The scheme also aims towards boosting exports whereby out of the total production, more than 75% is would be exported worth ~INR 2,45,000 crore.
  • A rise in the domestic value addition is expected at 20-25% which would increase both domestic manufacturing and value addition will help significantly reduce the large foreign exchange which would otherwise be unnecessarily spent.
  • The scheme aims to lead large-scale electronics manufacturers to provide tremendous employment opportunities. The scheme aims to provide aims to generate over 1,80,000 jobs over the next 4 years.
  • The Promotion of this scheme towards large-scale electronics manufacturing would significantly contribute towards a benchmark of achieving a USD 1 Trillion digital economy and a USD 5 Trillion GDP by the next decade.

The Future:

The vision is to position India as a global superpower for Electronics Design and Manufacturing which would encourage India as a country for developing core components, including chipsets, and creating an encouraging environment for the industry to compete globally.
Currently, the demand in India for laptops & tablets is largely met via imports valued at around? 32,340 crores (USD 4.62 billion) The market for IT Hardware is dominated by 6-7 companies globally who have captured around 70% of the world’s market share. These giants exploit the large economies to compete in global markets. With the Global Markets in turmoil to source materials manufacturing companies across the globe are looking to diversify their manufacturing locations.
Schemes like PLI would help in making India a global power in electronics manufacturing to further expand create domestic giants in order to create demand and provide the supply as well to cater to the emerging global electronics market.
Copy of the press release is enclosed. “

 

 

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