Hardware incentive scheme gets proposals worth Rs 2,350 crore

The government has received proposals from 19 electronics manufacturers totalling up to production worth Rs 1,60,000 crore over the next four years under an incentive scheme to boost domestic production of personal computers, laptops, tablets and servers.

These proposals are expected to bring additional investments worth Rs 2,350 crore in electronics manufacturing, the government said on Tuesday.

Top companies that have submitted applications under the Production-linked Incentive (PLI) scheme for IT hardware launched in March include Dell, the subsidiaries of key Apple Inc suppliers Wistron and Foxconn, along with homegrown phone maker Lava.

However, major electronics firms such as HP and Samsung are missing from the initial list of applicants.

Dixon, Infopower (a joint venture between Sahasra and MiTAC), Bhagwati (Micromax group) are among the 14 domestic companies that have filed applications, the government said in a statement.

Ravi Shankar Prasad, Union Minister for Electronics & IT, Communications, Law and Justice, said the PLI scheme for IT hardware has been a huge success in terms of the applications received from global as well as domestic companies.

“The industry has reposed its faith in India’s stellar progress as a world-class manufacturing destination…,” he said.

India is “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,” he added.

The scheme extends an incentive of 4% to 2% and 1% on net incremental sales.

The scheme is expected to promote exports significantly. Out of the total production of Rs 1,60,000 crore in the next four years, more than 37% will be contributed by exports of the order of Rs 60,000 crore, the government said.

“This is a testimonial to India’s capacity to become the manufacturing hub for IT hardware… We are certain that with forward-looking policies like this, India will reach its goal of becoming a $5 trillion economy, and electronics will contribute $1 trillion to it,” said Pankaj Mohindroo, Chairman, India Cellular & Electronics Association (ICEA).

ET reported earlier this week that HP, Dell, Foxconn, Samsung, Wistron and other electronics manufacturers have called for targets in the PLI scheme to be revised or timelines extended.

The electronics manufacturers, reaching out to the Ministry of Electronics and IT in separate meetings, said applicants may be discouraged from taking up the scheme and investing in the country minus the proposed changes.

The government said out of the total, while IT hardware companies have proposed production of over Rs 1,35,000 crore, domestic companies have proposed more than Rs 25,000 crore.

The scheme, which is expected to significantly promote exports, will generate about 37,500 direct jobs in the next four years along with indirect employment of nearly three times.

The domestic value addition in products is also expected to increase from the current 5-12% to 16-35% over the next few years.

The increased demand in India because of the PLI scheme and other initiatives will help in making the country competitive in electronics manufacturing and boost its Atmanirbhar Bharat movement, Prasad said.

The PLI scheme in IT hardware came on the heels of a similar PLI scheme for mobile phones.

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