PLI scheme heralds new era in India’s Electronics Manufacturing Industry

Under the leadership of Prime Minister Shri Narendra Modi and his initiatives such as the “Digital India” and “Make in India” programs, India has witnessed an unprecedented growth in electronics manufacturing in the past five years. The National Policy on Electronics 2019 envisions positioning India as a global hub for electronics system design and manufacturing (ESDM) by focusing on size and scale, promoting exports and enhancing domestic value addition by creating an enabling environment for the industry to compete globally.

The Ministry of Electronics and Information and Technology (MeitY) has approved 14 eligible applicants under the Production Linked Incentive Scheme (PLI) for IT Hardware, which extends an incentive of 4% to 2%/1% on net incremental sales (over base year of FY 2019-20) of goods under target segments that are manufactured in India to eligible companies, for a period of four years (FY2021-22 to FY 2024-25). The target segments under the PLI Scheme for IT Hardware include laptops, tablets, all-in-one personal computers (PCs), and servers. The scheme proposes production linked incentives to boost domestic manufacturing and attract large investments in the value chain of these IT Hardware products.

While giving approval to eligible applicants under the PLI Scheme, Shri Ravi Shankar Prasad, Union Minister for Electronics & IT, Communications, Law and Justice, said that the scheme has been a huge success in terms of the applications received from global as well as domestic manufacturing companies. The industry has reposed its faith in India’s stellar progress as a world class manufacturing destination and this resonates strongly with the Prime Minister’s clarion call of AtmaNirbhar Bharat—a self-reliant India.

Four companies have been selected under the category IT Hardware Companies, including Dell, ICT (Wistron), Flextronics, and Rising Stars Hi-Tech (Foxconn).

Under the category of Domestic Companies, 10 companies namely Lava International Ltd, Dixon Technologies (India) Ltd, Infopower Technologies (JV of Sahasra and MiTAC), Bhagwati (Micromax) Neolync, Optiemus, Netweb, Smile Electronics, VVDN, and Panache Digilife have been approved.

Over the next four years, the approved companies under the PLI Scheme for IT Hardware are expected to lead to a total production of more than INR1.61 lakh crore. Out of the total production, the approved companies under IT Hardware companies category have proposed a production of INR84,746 crore. The approved companies under Domestic Companies category have proposed a production of INR76,007 crore. The scheme will bring additional investment in IT Hardware manufacturing to the tune of INR2,517 crore.

The scheme will generate an additional direct employment opportunities of more than 36,000  in next four years along with the creation of additional indirect employment of nearly three times the direct employment. Domestic Value Addition is expected to grow from the current 10-15% to 25-30%.

With the demand for electronics in India expected to grow manifold by 2025, it is expected that the PLI scheme and other initiatives to promote electronics manufacturing will help in making India a competitive destination for electronics manufacturing and give boost to AtmaNirbhar Bharat. Creation of domestic champion companies in electronics manufacturing under the scheme will stimulate local growth while aiming for global scale.

Given the current global scenario, the world of manufacturing is undergoing a paradigm shift. Manufacturing companies across the globe are looking to diversify their manufacturing locations to mitigate the risk involved in depending on a single market.

PLI Schemes will help in making India a globally competitive destination for electronics manufacturing and create domestic champions to further the country’s mission of achieving an AtmaNirbhar Bharat. EET India