IT Minister Ashwini Vaishnaw revealed that the government has received 38 applications for the PLI Scheme 2.0 for IT hardware of which over 25 are domestic companies, as per an NDTV report. The applicants include companies like HP, Dell, Lenovo, Thompson, Acer, and Asus. Tech giants Apple and Samsung are currently not on the list.
This development comes weeks after the Ministry of Commerce and Industry announced that the import of laptops, tablets, all-in-one personal computers (AIO PC), and ultra-small form factor (USFF) computers and servers under code HSN 8741 will be restricted starting November 1.
Why are companies choosing to produce in India?
These companies will manufacture laptops and tablets in India under the Centre’s production-linked incentive (PLI) scheme for IT hardware. While the scheme was initially introduced in 2021, the government increased the incentive outlay from Rs. 7,325 crore to Rs. 17,000 crore in May. Under the scheme, companies assembling laptops, tablets, all-in-one PCs, and USFF computers would receive an incentive of 3%, 2%, 1%, and 1% on net incremental sales of manufactured goods (over the base year 2022-23) respectively.
Simply put, this means that if a company is producing tech in India it will receive financial support from the government. Moreover, if a company makes incremental investments (such as exclusively producing a certain component of a product) in the manufacturing process, it will be entitled to additional financial benefits.
Financial benefits have been capped at ₹ 4,500 Crore for Global companies, ₹ 2,250 Crore for Hybrid (Global/Domestic) companies, and ₹ 500 Crore for Domestic companies. This money will be distributed over a period of 6 years with incremental support over the years, going from Rs. 321 crore in year 1 to Rs. 6,118 crore in year 6. The last date to apply for the scheme was August 30, which explains why we saw a flurry of new applicants being announced yesterday.
Source: Ministry of Electronics& Information Technology (MeitY)
Why it matters:
According to a report by the Mint, the PLI scheme was an attempt by the Indian government to boost domestic manufacturing of laptops and other devices but the initial scheme (capped at Rs. 7,325 crore) didn’t elicit a response from the tech industry. With the new scheme offering more financial support and the upcoming import restrictions, the government might see more success in reducing reliance on laptops imported from abroad.
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