The Union Cabinet on Wednesday approved a production-linked incentive (PLI) scheme for IT hardware. The scheme proposes an incentive to boost domestic manufacturing and attract large investments in the value chain of IT Hardware. The scheme includes products like laptops, tablets, personal computers (PCs) and servers. “This completes the triangle of electronic manufacturing in India,” said Union Minister Ravi Shankar Prasad, as PLI schemes for mobile phones and telecom gear have been announced earlier.
The total cost of the proposed scheme is approximately Rs.7,350 crore over 4 years, which includes an incentive outlay of Rs.7,325 crore and administrative charges of Rs 25 crore.
“Rs 30,000 crore worth of laptops and Rs 3,000 crore worth of tablets are currently sold in India. Of this, more than 80 per cent is imported. As a result of the latest PLI, the government hopes to draw to India the top 5 global companies which control 50 per cent of the international market. A total Rs 3,26,00 crore worth of production will be achieved, of which 75 per cent will be made up by exports,” Telecom Minister Ravi Shankar Prasad, said.
According to Prasad, the Indian government’s aim is to make Indian IT hardware as successful as Indian IT services which includes companies like Tata Consultancy Services (TCS), HCL Technologies, Infosys, Wipro and Tech Mahindra on a global scale.
“Ten target sectors along with specific product lines having high growth potential were identified by NITI Aayog for implementation of PLI Schemes. PLI Scheme for IT Hardware is a further step in that direction,” said Prasad, who has the Information Technology and Electronics portfolio in the central government.
“Right now, the value addition of IT hardware is around 5-10%. In the next five years, this will increase to 20-25%,” said Prasad. The direct and indirect revenues generated from production under the new PLI scheme are expected to be ₹ 15,760 crore over next 4 years. It also is expected to generate over 1,80,000 jobs during the same time period.
Prasad further said that the Production-Linked Incentive Scheme for mobile phones and components which was announced in April during the height of Covid-19 delivered production worth Rs 35,000 crore, created 22,500 jobs, and brought around Rs 1,300 investment.