44 Firms Including Leading Global Laptop Manufacturers Apply For Incentives Under Rs 17,000 Cr PLI Scheme For IT Hardware

Forty-four companies, including leading global players, have submitted applications for incentives under the production-linked incentive (PLI) 2.0 scheme for domestic manufacturing of laptops, tablets, all-in-one personal computer servers and ultra-small form factor (USFF), The Economic Times reported.

The window for receiving applications under the PLI scheme 2.0 for IT Hardware is August 30.

"Leading laptop companies have registered for PLI and some of them are ready to start manufacturing in India any time. Global server companies have said that they want to make India an export hub for servers," news agency PTI quoted a senior official.

The incentive scheme is key to India's ambitions to become a powerhouse in the global electronics supply chain, with the country targeting annual production worth $300 billion by 2026.

Dell, Acer, Samsung, LG Electronics, Apple Inc, Lenovo and HP Inc are some of the key companies selling laptops in the Indian market, and a substantial portion is imported from countries such as China.

On May 17, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved the PLI Scheme 2.0 for IT hardware. The incentive scheme aims to broaden and deepen the IT hardware manufacturing ecosystem by encouraging the localisation of components and sub-assemblies and developing a resilient supply chain within the country.

The scheme was notified on May 29.

The scheme will provide an average incentive of around 5% on net incremental sales (over the base year) of laptops/tablets/servers manufactured in India to eligible companies for six years.

With the application window for PLI scheme set to close by August 30, the Union government announced that it will introducing a new licence regime for import of IT hardware.

The Directorate General of Foreign Trade (DGFT) announced on Friday (August 4) that the new licensing regime for importing some categories of laptops, tablets and personal computers will come into effect beginning November 1.

On Thursday (August 3), the commerce ministry announced that hardware manufacturers will now require a valid licence and must pay duty to import PCs, laptops, tablets, servers etc.

The Commerce Ministry notification said that exemption would be provided on the import licence only for up to 20 of such items per consignment for the purpose of research and development, testing, benchmarking and evaluation, repair and re-export and for product development.

The government's recent decision to restrict imports is seen as a bid to boost the domestic production and assembly of electronic goods. Electronic imports, including laptops, tablets, and personal computers, accounted for $19.7 billion between April and June 2023, expanding at a rate of roughly 6% each year.

Union Minister of State (MoS) for Electronics and Information Technology Rajeev Chandrasekhar said that the restrictive regime for the import of laptops/tablets/PCs etc aimed to reduce import dependence and spur domestic manufacturing of laptops and personal computers. 

India is offering a PLI scheme to scale up domestic manufacturing, create national champions, help generate large-scale employment, establish self-reliance in a substantial part of the manufacturing value chain and transform India into a manufacturing hub for ICT (Internet, communication, technology) products for the world.

While manufacturing of mobile phones has been an impressive success story, in other electronic products such as laptops, servers, and smart devices, the pace of change has not been as brisk.