India’s Cabinet Approves Rs. 17,000 Crore Incentive Scheme 2.0 to Boost IT Hardware Manufacturing
Analysis: The Union Cabinet of India, chaired by Prime Minister Narendra Modi, has given its approval to the Production Linked Incentive (PLI) Scheme 2.0 for IT Hardware. This scheme, with a budgetary outlay of Rs. 17,000 crore, aims to bolster the manufacturing of IT hardware in the country. It comes as a continuation of the successful PLI scheme implemented for mobile phones.
India has witnessed consistent growth in electronics manufacturing, achieving a compound annual growth rate (CAGR) of 17% over the last eight years. The country recently achieved a significant production milestone, crossing $105 billion (approximately Rs. 9 lakh crore). Additionally, India has emerged as the world’s second-largest manufacturer of mobile phones, with exports exceeding $11 billion (around Rs. 90 thousand crore).
The PLI Scheme 2.0 for IT hardware will cover various products, including laptops, tablets, all-in-one PCs, servers, and ultra small form factor devices. The scheme’s tenure is set at six years, and it aims to generate an expected incremental production value of Rs. 3.35 lakh crore. Moreover, it is anticipated to attract an incremental investment of Rs. 2,430 crore and create approximately 75,000 direct employment opportunities.
This approval is significant for India’s position in the global electronics manufacturing ecosystem, as the country is increasingly becoming a trusted supply chain partner for major global players. Many prominent IT hardware companies have expressed interest in establishing manufacturing facilities within India. This trend is further supported by the strong IT services industry, which exhibits robust demand within the country.
The PLI Scheme 2.0 aims to encourage companies to manufacture their IT hardware products in India, with the intention of supplying both domestic and international markets. By attracting investments and promoting local production, the scheme seeks to strengthen India’s position as a leading electronics manufacturing country and enhance its potential as an export hub.
Overall, this decision by the Cabinet marks a significant step towards boosting India’s IT hardware manufacturing sector and aligns with the country’s objective of promoting self-reliance and becoming a global electronics manufacturing hub.
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Cabinet approves Production Linked Incentive Scheme – 2.0 for IT Hardware
The Union Cabinet, chaired by the Hon’ble Prime Minister Shri Narendra Modi, today approved the Production Linked Incentive Scheme 2.0 for IT Hardware with a budgetary outlay Rs. 17,000 crore.
Context:
- Electronics manufacturing in India has witnessed consistent growth with 17% CAGR in last 8 years. This year it crossed a major benchmark in production – 105 billion USD (about Rs 9 lakh crore)
- India has become the world’s second largest manufacturer of mobile phones. Exports of mobile phones crossed a major milestone of 11 billion USD this year (about Rs 90 thousand crore)
- The global electronics manufacturing ecosystem is coming to India, and India is emerging as a major electronics manufacturing country
- Building on the success of Production Linked Incentive scheme (PLI) for mobile phones, the Union Cabinet today approved PLI Scheme 2.0 for IT hardware
Salient features:
- PLI Scheme 2.0 for IT hardware covers laptops, tablets, all-in-one PCs, servers and ultra small form factor devices
- The budgetary outlay of the scheme is Rs. 17,000 crore
- The tenure of this scheme is 6 years
- Expected incremental production is Rs. 3.35 Lakh crore
- Expected incremental investment is Rs. 2,430 crore
- Expected incremental direct employment is 75,000
Significance:
- India is emerging as a trusted supply chain partner for all global majors. Large IT hardware companies have shown keen interest in establishing manufacturing facilities in India. This is further supported by strong IT services industry having good demand within the country.
Most majors would like to supply domestic markets within India from a facility situated in India as well as make India an export hub.
