Dell, HP, Lenovo and Foxconn are among the 27 companies that have received approval from the Centre to manufacture laptops, computers and servers in India under the government’s Production Linked Incentive (PLI) scheme for IT hardware.
“Twenty-three of these companies are ready to start manufacturing on day zero. And four companies will start within 90 days,” IT Minister Ashwini Vaishnaw said Saturday.
In May, the Centre had more than doubled the IT Hardware PLI to Rs 17,000 crore with a six year tenure since it was first cleared in 2021 with an outlay of Rs 7,350 crore. The first version of the scheme was a laggard with only two companies – Dell and Bhagwati – managing to meet first year (FY22) targets, and the industry calling for a renewed scheme with an increased budgetary outlay.
By the end of August over 40 companies had applied to participate in the scheme. Apple has opted to skip.
However, the selected companies will invest just around Rs 3,000 (Rs 500 crore a year on an average) crore over six years as opposed to the initial projection of Rs 4,000 crore over these many years. The net production value under the scheme has been pegged at Rs 3.5 lakh crore and it is expected to create 50,000 direct jobs and 1,50,000 indirect jobs over its entire course.
Under the scheme, the incentive per company shall be applicable on net incremental sales of manufactured goods over the base year subject to a ceiling of Rs 4,500 crore for global companies, Rs 2,250 crore for hybrid (global/domestic) companies and Rs 500 crore for domestic companies.
The government is hoping for the scheme to be a success so that the local production can address a part of the domestic demand for laptops and computers in the country.
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India is a big importer of IT hardware, with a major chunk of such goods coming in from China. Imports of personal computers including laptops, and palmtops, from China stood at $558.36 million in April-May this year as against $618.26 million in the year-ago period. China accounts for roughly 70-80 per cent of the share of India’s imports of personal computers, laptops.
Earlier this month, the government rolled out an ‘import management system’ for IT hardware, including laptops and computers, modifying its initial stance of imposing physical restrictions. The key idea behind the measure is to check imports of laptops and computers, especially since a majority of them come from China, which has New Delhi worried.
The changes to the import regime were made as concerns were raised by some countries including the US, China, South Korea and Taiwan at a recent meeting of the WTO. India, however, sees its decision to introduce certain terms and conditions on the import of IT hardware such as laptops and personal computers as a security measure, rather than a trade consideration.
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