PLI Scheme in IT Hardware

33 Companies Apply for PLI Scheme for IT Hardware Worth 7,350 Crore

Ministry of Electronics and IT (MeitY) released a statement stating it has received several applications for the PLI Scheme worth Rs. 7,325 Crore.

PLI Scheme in IT Hardware Well Underway

As many as 19 companies including Dell, Wistron, Rising Stars Hi-Tech (Foxconn), and Lava have filed their application. Along with these, a 14 further companies have filed applications under the domestic companies category. These companies include Dixon, Infopower (JV of Sahasra and MiTAC), Bhagwati (Micromax), Syrma, Orbic, Neolync, Optiemus, Netweb, VVDN, Smile Electronics, Panache Digilife, HLBS, RDP Workstations, and Coconics.

The scheme ended on April 30, 2021, while incentives will be applicable from April 1, 2021.

IT Minister Ravi Shankar Prasad termed the PLI scheme as a huge success. He said that in the context of the applications received from domestic as well global companies. In a statement, he said, “We are optimistic and looking forward to building a strong ecosystem across the value chain and integrating with the global value chains, thereby strengthening the electronics manufacturing ecosystem in the country”.

This PLI Scheme covers electronics like laptops, tablets, all-in-one PCs and servers. The PLI Scheme will offer an incentive of 1%-4% to companies.

The scheme will consider FY 2019-20 as the base year.

Guidelines of the PLI Scheme

The scheme guidelines point out the amount of investment a company needs to make to qualify.

  • Global companies have to invest Rs 500 crore. Along with that, they have to achieve incremental sales as follows
    • First Year: Rs 1,000 crore
    • Second Year: Rs 2,500 crore
    • Third Year: Rs 5,000 crore
    • Fourth Year: Rs 10,000 crore.
  • Domestic companies only have to invest Rs 20 crore to qualify. Along with that, they have to achieve incremental sales as follows:
    • First Year: Rs 50 crore
    • Second Year: Rs 100 crore
    • Third Year: Rs 200 crore
    • Fourth Year: Rs 300 crore.

As per various estimates, this scheme will create a production value of Rs 1,60,000 crore. From this, IT Hardware companies propose production of over Rs 1,35,000 crore. On the other hand, domestic companies have proposed production of over Rs 25,000 crore. Not only this, the scheme will also boost India’s IT exports.

Out of the total production, more than 37% will be contributed by exports. That comes out to be around Rs 60,000 crore. The scheme will bring additional investment in electronics manufacturing of upto Rs 2,350 crore.

This scheme will also boost employment in the sector. The scheme will create around 37,500 direct employment opportunities in the next 4 years.

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