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Cabinet Nod to Modified Version of PLI Scheme, Rs 17,000 Crore Budget Set Aside for IT Hardware

Union minister Ashwini Vaishnaw briefs the media on cabinet decisions, in New Delhi on Wednesday. (Image: PTI/Kamal Singh)

Union minister Ashwini Vaishnaw briefs the media on cabinet decisions, in New Delhi on Wednesday. (Image: PTI/Kamal Singh)

A version of the production linked incentive scheme was already in existence but after talking to industry insiders and based on feedback, the central government has introduced some changes

Union IT minister Ashwini Vaishnaw on Wednesday said the Cabinet approved the Production Linked Incentive Scheme 2.0 for IT hardware – covering laptops, tablets, all-in-one PCs, servers and ultra-small form factor devices – with a budgeted investment of Rs 17,000 crore. A version of this scheme was already in existence but after talking to industry insiders and based on feedback, the central government has introduced some changes.

The modified Production Linked Incentive (PLI) scheme was approved by Prime Minister Narendra Modi. “The tenure of the programme is six years and expected investment is Rs 2,430 crore. We are also expecting the investment to be increased,” Vaishnaw said.

He said the expected incremental production was Rs 3 lakh 35 crore, while the expected incremental direct employment was 75,000. The PLI might also create 2,00,000 indirect jobs, he added.

“Along with electronics manufacturing, in the telecom sector two Indian companies have become important manufacturers in the world for complete radio equipment. The US, Germany and France are purchasing telecom equipment from India and, soon, the UK will too. This is the big picture in which we have to see the role of IT hardware,” the minister said.

India Cellular and Electronics Association (ICEA) applauded the revised PLI for IT hardware and is expecting a significant boost in domestic manufacturing and exports. The IT hardware industry is targeted to reach a production of $24 billion by 2025-26, with exports anticipated to be in the range of $12-17 billion during the same period, the industry body said.

It further said the revised PLI was expected to serve as a major catalyst for both global and domestic companies aiming to establish or expand their IT hardware manufacturing operations in India. It also said the scheme had made the investment criteria more flexible, extending it over a six-year period as compared to the previous four-year span. To further incentivise localisation, additional optional incentives have been introduced, it added.

“The PLI 2.0 will ensure investments across the IT hardware value chain, demonstrating the government’s receptiveness to industry inputs and their determination to translate words into action,” said Pankaj Mohindroo, chairman of ICEA.

He said India at present imported a significant portion of laptops and tablets for consumption. But this revised PLI scheme will not only foster domestic manufacturing but also likely benefit major global manufacturers of IT hardware products such as laptops and tablets, he added.

“We urge the global industry to acknowledge this and consider India as a crucial destination for manufacturing IT hardware products,” Mohindroo said.

Anurag Awasthi, vice-president of India Energy Storage Alliance (IESA), told News18 that the scheme covered all aspects of semiconductor manufacturing – PCBs, ATMPs, component manufacturing, contract manufacturing, display panels, memory devices, power adapters etc – astutely and comprehensively.

“This well-structured, clear, flexible, deliberated and curated PLI 2.0 scheme will be a harbinger of nation building in India’s ‘techade’,” Awasthi said.

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