PLI scheme for IT Hardware

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    Recently, Some companies have applied to avail the benefits of the government’s Production-Linked Incentive (PLI) scheme for manufacturing IT hardware in India.

    PLI for IT Hardware

    • It was notified on 03.03.2021. 
    • The PLI Scheme extends an incentive of 4% to 2% and 1% on net incremental sales (over the base year of FY 2019-20) of goods under target segments that are manufactured in India to eligible companies, for four years (FY 2021-22 to FY 2024-25).
    • The scheme is expected to lead to total production worth Rs 1.6 lakh crore
      • Out of the total, IT hardware companies have proposed production worth over Rs 1.35 lakh crore, and domestic companies have proposed output of more than Rs 25,000 crore
    • Beneficiaries: IT hardware sector such as laptops, tablets, all-in-one PCs and servers.
      • It will benefit five major global players and ten domestic champions in the field of IT hardware.

    Significance 

    • The scheme will facilitate investments worth ?2,350 crores in India’s electronics manufacturing space and generate 37,500 direct employment opportunities.
    • It will enable domestic value addition in IT hardware to rise from 5-12% at present to 16-35 % by 2025.
    • It will reduce imports and enhance the development of the electronics ecosystem in the country.
      • Currently, 80% of the laptop and tablet demand in the country is met through imports. 
    • The goal is to make India more compliant with the World Trade Organisation (WTO) commitments and also make it non-discriminatory and neutral with respect to domestic sales and exports.

    Source: LM