Cabinet approves Production Linked Incentive Scheme – 2.0 for IT Hardware

The Union Cabinet, chaired by the Hon’ble Prime Minister Shri Narendra Modi, today approved the Production Linked Incentive Scheme 2.0 for IT Hardware with a budgetary outlay Rs. 17,000 crore.

Context:

    • Electronics manufacturing in India has witnessed consistent growth with 17% CAGR in last 8 years. This year it crossed a major benchmark in production – 105 billion USD (about Rs 9 lakh crore)
    • India has become the world’s second largest manufacturer of mobile phones. Exports of mobile phones crossed a major milestone of 11 billion USD this year (about Rs 90 thousand crore)
    • The global electronics manufacturing ecosystem is coming to India, and India is emerging as a major electronics manufacturing country
    • Building on the success of Production Linked Incentive scheme (PLI) for mobile phones, the Union Cabinet today approved PLI Scheme 2.0 for IT hardware

Salient features:

    • PLI Scheme 2.0 for IT hardware covers laptops, tablets, all-in-one PCs,   servers and ultra small form factor devices
    • The budgetary outlay of the scheme is Rs. 17,000 crore
    • The tenure of this scheme is 6 years
    • Expected incremental production is Rs. 3.35 Lakh crore
    • Expected incremental investment is Rs. 2,430 crore
    • Expected incremental direct employment is 75,000

Significance:

    • India is emerging as a trusted supply chain partner for all global majors. Large  IT hardware  companies   have  shown keen interest in establishing manufacturing facilities in India. This is further supported by strong IT services industry having good demand within the country.

Most majors would like to supply domestic markets within India from a facility situated in India as well as make India an export hub.