The Government on Thursday said it has received 40 applications from manufacturers, including Dell, HP, Foxconn, Flextronics and Optiemus, under the production linked incentive (PLI) scheme for IT hardware, while 88 companies have registered for the scheme.
The PLI scheme will have product categories, including laptops, servers, personal computers (PCs) and tablets PCs. The scheme (PLI 2.0) has attracted a lot of applicants this time (as compared to existing PLI) because both the tenure and the budget have been more than doubled.
While the budget has been increased to ₹17,000 crore from ₹7,350 crore, the tenure of the scheme has been increased to six years from four years in the previous PLI scheme. Also, the average incentive has been increased to five per cent, from around two per cent in the earlier PLI scheme.
The ‘overwhelming’ response has led to a PLI outlay of ₹22,890 crore, with an incremental investment of over ₹5,000 crore and incremental production of ₹4.7 lakh crore, Ashwini Vaishnaw, Minister of Communications and IT, said.
However, the Minister clarified that applicants will be shortlisted as per scheme guidelines within the approved outlay of ₹17,000 crore, adding that the scheme will attract employment for around 75,000 people.
Other companies include Lenovo, Thompson, Acer, and Asus, which will manufacture laptops, while HP, VVDN and Lenovo will manufacture servers. Some of the global manufacturers will also manufacture with Indian partners.
Apple, Samsung have not applied
However, Apple and Samsung have not applied under the scheme as of Wednesday evening. The government had fixed August 30 (till midnight) as the last date for accepting applications under the scheme.
“India is emerging as a trusted supply chain partner and value-added partner... companies are happy to come to India for manufacturing and design. Practically every large laptop/ personal computer (PC) manufacturer is there ... we are likely to see 35-48 per cent value additions in manufacturing,” Vaishnaw said on Wednesday.
Apart from laptops, the target segments include tablet personal computers (PCs), all-in-one PCs, servers and ultra-small form factor. Most majors would like to supply the domestic markets from a facility situated in India, as well as make India an export hub, he said.
Vaishnaw also said with the semiconductor policy also in place, these hardware manufacturers can utilise the chips made in India so that there could be more value addition to their products.
Under the scheme, the companies would get an incentive of five per cent on an average, and as and when they increase the volume of localisation, the incentive would increase over the next six years.
If an applicant falls short in achieving the incremental investment target on cumulative basis by a certain percentage, its payable PLI amount will be reduced byone-half of that percentage,provided the shortfall is not more than 40 per cent, the Minister said.
Some of the companies are expected to start manufacturing from April next year, while some will start from 2025 to get PLIs, under the scheme, said senior officials at MeitY.
“HP is a longstanding partner of India’s digital transformation journey and one of the pioneers of the country’s IT manufacturing sector. We welcome the PLI scheme for IT hardware manufacturing and look forward to exploring new opportunities to meet the growing demand for PCs. India is a dynamic growth market and we are excited about the possibilities ahead,” a company spokesperson told businessline.