The Union Cabinet, led by Prime Minister Narendra Modi, has granted approval to a new Production Linked Incentive (PLI) Scheme for the IT hardware sector, with a substantial budget allocation of Rs 17,000 crore. This initiative, known as PLI Scheme 2.0 for IT Hardware, aims to capitalize on India’s success in mobile phone manufacturing and boost exports. The previous PLI scheme for mobile phones played a crucial role in establishing India as the world’s second-largest mobile phone manufacturer, with mobile phone exports surpassing $11 billion this year.
The electronics manufacturing industry in India has witnessed consistent growth over the past eight years, achieving an impressive Compound Annual Growth Rate (CAGR) of 17%. This year, the industry’s production reached a significant milestone of $105 billion. India’s emergence as the world’s second-largest mobile phone manufacturer and the achievement of $11 billion in mobile phone exports demonstrate its strength in the electronics manufacturing sector. These achievements have garnered global attention and positioned India as a prominent player in the electronics manufacturing ecosystem.
Building upon the success of the PLI scheme for mobile phones, the Union Cabinet has approved the PLI Scheme 2.0 for IT hardware. This decision reflects the government’s commitment to promoting and supporting the growth of the IT hardware manufacturing sector in India. The scheme covers various products such as laptops, tablets, all-in-one PCs, servers, and ultra-small form factor devices. With a budget allocation of Rs. 17,000 crores and a duration of six years, the scheme provides a long-term framework to drive growth and development in the IT hardware industry.
Implementation of the PLI Scheme 2.0 for IT hardware is expected to result in an incremental production value of Rs. 3.35 lakh crore, indicating the potential for significant growth and expansion within the sector. The scheme also aims to attract incremental investments of Rs. 2,430 crores, facilitating the infusion of capital into the IT hardware manufacturing ecosystem. Furthermore, it is projected to generate approximately 75,000 direct jobs, contributing to increased employment opportunities in the IT hardware sector.
India’s reputation as a reliable supply chain partner for global companies is growing rapidly. Prominent IT hardware corporations have shown keen interest in establishing manufacturing units in the country. This positive trend is reinforced by the robust domestic demand for IT services. Major companies aspire to serve both the Indian market and leverage India as an export hub for their products.
The approval of the PLI Scheme 2.0 for IT hardware signifies the government’s commitment to fostering the growth of the electronics manufacturing industry in India. With a substantial budget allocation, a wide range of covered products, and a long-term framework, this scheme aims to propel the IT hardware sector to new heights, capitalizing on India’s potential and boosting exports in the process.
