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Cabinet approves Production Linked Incentive Scheme for laptops, tablets, servers, all-in-one PCs

The Union Minister for Environment, Forest & Climate Change, Information & Broadcasting and Heavy Industries and Public Enterprise, Shri Prakash Javadekar and the Union Minister for Law & Justice, Communications and Electronics & Information Technology, Shri Ravi Shankar Prasad briefing the media on Cabinet Decisions, in New Delhi on March 21, 2020.

The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved a Production Linked Incentive (PLI) scheme for IT Hardware. The scheme would provide manufacturers who make and export laptops, tablets, All-in-One PCs and servers an incentive of 4% to 2% / 1% on net incremental sales (over base year i.e. 2019–20) of goods manufactured in India to eligible companies, for a period of four years.

“The scheme is likely to benefit 5 major global players and 10 domestic champions in the field of IT Hardware manufacturing,” the government said in a press release. 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.

“The scheme has an employment generation potential of over 1,80,000 (direct and indirect) over 4 years,” the government said. It “will provide impetus to Domestic Value Addition for IT Hardware which is expected to rise to 20% – 25% by 2025.”

When asked in a press conference announcing the scheme about the lack of trained personnel in India working for global companies, IT Minister Ravi Shankar Prasad pulled out his phone, and said, “This is the latest Apple company mobile phone made in India, and being exported from India outside. I would like to tell you very categorically that India’s human resource — it should not be misunderstood that I am trying to propagate any one product — but what is important is, our human resources, in terms of engineers, in terms of production workers, are world class.”

Previous PLIs

This is the latest in a string of announcements on PLIs for the electronics manufacturing industry. In November 2020, Rs 1.45 lakh was earmarked for key sectors like electronics and solar power to encourage domestic manufacturing. A 6% PLI was announced for domestic telecom equipment manufacturing last week. In June, the first batch of PLIs in electronics was announced for mobile phones, associated factories, and supply chains. Three Apple manufacturing partners were among those who were approved to benefit from the scheme.

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“The vision of National Policy on Electronics 2019 notified on 25.02.2019 is to position India as a global hub for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components, including chipsets, and creating an enabling environment for the industry to compete globally,” the government said.

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I cover the digital content ecosystem and telecom for MediaNama.

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