The Union Cabinet on Wednesday approved the Production Linked Incentive Scheme 2.0 for IT Hardware with a budget of Rs. 17,000 crore. It will transform the sector. This scheme will boost employment, strengthen our eco-system for innovation and lead to greater investments.
#Cabinet approves the Production Linked Incentive Scheme (PLI) for IT Hardware
The budgetary outlay is Rs 17,000 crore and the tenure of the program is 6 years; expected investment is Rs 2,430 crore: Union Minister @AshwiniVaishnaw #CabinetDecisions pic.twitter.com/lmFui2KS4z
— PIB India (@PIB_India) May 17, 2023
In the last eight years, electronics manufacturing in India has experienced steady growth, achieving a 17% Compound Annual Growth Rate. This year, it reached a significant milestone in production, totaling $105 billion (approximately Rs. 9 lakh crore). India now stands as the world’s second-largest manufacturer of mobile phones, with mobile phone exports surpassing $11 billion (about Rs. 90 thousand crore).
As the global electronics manufacturing ecosystem increasingly moves to India, the country is emerging as a major player in this sector. Building upon the success of the Production Linked Incentive scheme for mobile phones, the Union Cabinet has now approved the PLI Scheme 2.0 for IT hardware.
Key features of the PLI Scheme 2.0 for IT hardware include its coverage of laptops, tablets, all-in-one PCs, servers, and ultra-small form factor devices. The scheme has a budgetary outlay of Rs. 17,000 crore and a duration of six years. It is expected to drive incremental production worth Rs. 3.35 lakh crore, attract incremental investments of Rs. 2,430 crore, and create 75,000 new direct employment opportunities.
The significance of this scheme lies in India’s growing reputation as a reliable supply chain partner for global technology giants. Numerous large IT hardware companies have demonstrated keen interest in establishing manufacturing facilities in India. Additionally, India’s strong IT services industry, which experiences substantial domestic demand, further supports the country’s appeal as a manufacturing and export hub for these companies.
What is a Production Linked Incentive (PLI)?
The Production Linked Incentives (PLI) Scheme is a government initiative designed to promote domestic manufacturing and boost India’s competitiveness in specific sectors.
The objective of the PLI Scheme is to attract investments, encourage domestic value addition, create employment opportunities, and enhance the competitiveness of Indian industries. It aims to make India a global manufacturing hub by incentivizing companies to increase their production capacity and invest in advanced technologies.
By providing financial incentives, the PLI Scheme encourages companies to expand their manufacturing operations within India, reduce import dependence, and contribute to the growth of the domestic economy. It also helps in attracting foreign direct investment and fostering technology transfer, thereby enhancing the overall competitiveness of Indian industries.
The PLI Scheme has been implemented in various sectors, including electronics manufacturing, mobile phone manufacturing, pharmaceuticals, automobiles, textiles, and more. It has proven to be an effective tool for promoting domestic manufacturing, attracting investments, and creating employment opportunities in targeted industries.