India approves second phase of PLI scheme for IT hardware

19 May 2023 CW Team

The Indian government has approved the second phase of the production-linked incentive (PLI) scheme for IT hardware, with a budgetary outlay of ₹17,000 crore. The scheme aims to attract global companies like Dell, HP, Apple and Samsung to manufacture in India.

The first phase of the PLI scheme for IT hardware was launched in 2021, with a budgetary outlay of ₹7,350 crore. However, the scheme was not very successful, with only three companies – Dell, Bhagwati Products (Micromax Informatics) and Dixon – meeting their targets.

The second phase of the PLI scheme has been designed to address the shortcomings of the first phase. The incentive rate has been increased from 2% to 5%, and the corpus has been increased from ₹7,350 crore to ₹17,000 crore. The scheme has also been made more flexible, with companies now able to choose 2023, 2024 or 2025 as the base year for starting production.

The government hopes that the second phase of the PLI scheme will be more successful than the first phase. The scheme is expected to attract investments of ₹2,430 crore and create 75,000 jobs. The government also expects the scheme to boost domestic production of IT hardware and increase exports.

The IT hardware industry is expected to grow rapidly in the coming years. The Indian Cellular and Electronics Association (ICEA) estimates that the industry will reach a production of $24 billion by FY26, with exports anticipated to be in the range of $12-17 billion in the same period.

The second phase of the PLI scheme is expected to play a major role in the growth of the IT hardware industry in India. The scheme will help to attract global companies to manufacture in India, boost domestic production and increase exports. The scheme is also expected to create jobs and boost the economy.

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