The Union Cabinet has authorised an upgraded version of the Production Linked Incentive (PLI) scheme for the manufacture of IT gear.
IT Hardware PLI Scheme
- The PLI scheme for IT gear was launched in March 2021.
- It offers over 4% incentives for incremental investment in domestic manufacturing for qualifying companies like Dell and Flextronics.
- The initiative intends to improve domestic manufacture, boost exports, and establish India as a major player in the IT hardware market.
- The initiative will run for six years, giving qualified enterprises with a long-term incentive to engage in domestic IT hardware manufacturing.
Increase in indigenous IT hardware
- The government emphasised the expansion of electronics industry in India.
- Over the last eight years, the compound annual growth rate has been 17%, with a production benchmark of $105 billion, including $11 billion in mobile phone exports.
New changes introduced
- The budgetary allocation for the PLI plan for IT hardware production is Rs 17,000 crore.
- The incentive rate has been raised to 5%, providing a greater benefit to businesses who invest in domestic production.
- An extra optional incentive for using domestically produced components has been created, albeit the particular rates of these incentives have not been stated.
- If the optional incentives are used correctly, the overall reward under the programme might be 8-9%.
Telecom hardware production achievements
- Telecom hardware manufacturing exceeded the expected 900 crore and achieved 1,600 crore.
- Some Indian firms have become big global exporters of complicated radio equipment.
Source: https://economictimes.indiatimes.com/industry/cons-products/electronics/cabinet-okays-pli-for-it-hardware-2-0-more-than-doubles-sops/articleshow/100302917.cms#:~:text=says%20Ashwini%20Vaishnaw-,The%20cabinet%20approved%20the%20second%20phase%20of%20the%20production%2Dlinked,Samsung%20to%20manufacture%20in%20India.