PLI scheme for IT hardware attracts 19 firms; Foxconn, Wistron, Dell apply

The scheme is expected to promote exports significantly. Of the total production of Rs 1.60 lakh crore, more than 37% will be contributed by exports of the order of Rs 60,000 crore.

Computer major Dell and contract manufacturers Foxconn, Wistron and Flextronics are among the 19 companies that have filed their applications under the production linked incentive (PLI) scheme for IT hardware, notified on March 3, 2021.

The scheme, with an outlay of Rs 7,350 crore over four years, will provide financial incentives in the range of 4% to 1% on the net incremental sales over the base year (2019-20) for manufacturing laptops, tablets, all-in-one PCs and services.

As per an official statement, the electronics hardware manufacturing companies that have applied under category IT hardware companies are Dell, ICT (Wistron), Flextronics, Rising Stars Hi-Tech (Foxconn) and Lava. 14 companies have filed applications under the category domestic companies which include Dixon, Infopower (JV of Sahasra and MiTAC), Bhagwati (Micromax), Syrma, Orbic, Neolync, Optiemus, Netweb, VVDN, Smile Electronics, Panache Digilife, HLBS, RDP Workstations and Coconics.

Over the next four years, the scheme is expected to lead to total production of about Rs 1,60,000 crore. Of the total production, IT Hardware companies have proposed a production of over Rs 1,35,000 crore and domestic companies have proposed a production of over Rs 25,000 crore.

The scheme is expected to promote exports significantly. Of the total production of Rs 1.60 lakh crore, more than 37% will be contributed by exports of the order of Rs 60,000 crore.

The scheme will bring in additional investment in electronics manufacturing to the tune of Rs 2,350 crore. It is expected to generate approximately 37,500 direct employment opportunities in the next four years along with the creation of additional indirect employment of nearly three times the direct employment.

Domestic Value Addition is expected to grow from the current 5-12% to 16-35%.

Currently, 80% of the laptop and tablet demand in the country is met through imports valued at Rs 29,470 crore ($4.21 billion) and at Rs 2,870 crore ($ 0.41 billion) respectively.

The market for IT hardware is dominated by 6-7 companies globally which account for about 70% of the world’s market share.

Earlier, the government has approved two PLI schemes on similar lines, one for mobile phones and the other for telecom equipment. While the outlay for mobile phones has been kept at Rs 41,000 crore for a period of five years providing incentives ranging between 4-6%, the one for telecom equipment has an outlay of Rs 12,195 crore for a period of five years providing incentives in the range of 4-7%.

In his address marking the conclusion of application window under the scheme, electronics and IT minister Ravi Shankar Prasad said the PLI scheme for IT hardware has been huge success in terms of the applications received from global as well as domestic companies engaged in manufacturing electronics hardware products. The National Policy on Electronics 2019 envisions positioning India as a global hub for Electronics System Design and Manufacturing (ESDM) by focusing on size and scale, promoting exports and enhancing domestic value addition by creating an enabling environment for the industry to compete globally.