PLI Scheme 2.0 for IT Hardware

August 31, 2023

GS Paper III Indian Economy

Context:

Recently, revised production-linked incentive (PLI) scheme for IT hardware has received an “excellent” response from 38 companies, including global ones such as HP, Dell, Lenovo and Foxconn as well as local maker Dixon Technologies.

Expected Benefits of PLI 2.0 IT Hardware

Rs 22,880 crore: Outlay of IT hardware PLI scheme.
Rs 4,000 crore: Total investment the scheme may attract.
Rs 3.35 trillion: Worth of estimated incremental production over six years.
48%: Likely increase in local value addition
75,000: Direct jobs may be created on account of the scheme.
April 2024: Time by when companies may begin manufacturing.

About Production-Linked Incentive (PLI) Scheme 2.0 for IT Hardware

Aim: Broadening and deepening the IT hardware manufacturing ecosystem in the country.
Incentive: It extends an average incentive of around 5 per cent on net incremental sales (over the base year) of goods manufactured in India and covered under the target segment, to eligible companies, for a period of six years.
Local Boost: Companies that locally manufacture certain components including memory modules, solid state drives and display panels will get additional incentives.
Target Segment: Laptops, Tablets, All-in-One PCs, Servers,Ultra Small Form Factor (USFF), Semiconductor design, IC manufacturing, and packaging are included.
Flexibility: It provides increased flexibility and options for applicants and is tied to incremental sales and investment thresholds to further incentivise growth.
About PLI schemes: As part of its AatmaNirbhar and Make in India plan, the government launched PLI schemes in varied sectors to make Indian manufacturers globally competitive, attract investments, enhance exports, integrate India into the global supply chain and reduce dependency on imports.