India approves 27 international companies to make IT hardware under incentive scheme

India has given the green light to 27 companies, including U.S. tech giants Dell, HP and China’s Lenovo, to manufacture IT hardware in the country under a production-linked incentive (PLI) scheme.

The scheme aims to boost domestic manufacturing and attract large investments in the value chain of IT hardware products.

The PLI scheme for IT hardware, which was approved by the government in May, has a budget of about $2 billion spread over six years. It covers the manufacturing of laptops, tablets, all-in-one personal computers, micro PCs and servers. The scheme will provide companies incentives for goods manufactured in India.

The Ministry of Electronics and IT said in a statement on Saturday that the scheme will enable the production of IT hardware of well-known brands such as Acer, Asus, Dell, HP, Lenovo and others in India. The ministry said that 23 out of the 27 approved applicants are ready to start manufacturing on day zero.

The minister of railways, communications and electronics and IT, Ashwini Vaishnaw, told industry leaders and media that the scheme will create about 200,000 jobs, comprising 50,000 direct employment opportunities and 150,000 indirect employment opportunities. He also said that the scheme will increase the Indian IT hardware market from $15.52 billion in 2022 to $22.77 billion in 2027.

The ministry said that the IT hardware manufacturing sector faces the lack of a level playing field vis-à-vis competing nations and needs a mechanism to compensate for the manufacturing disabilities vis-à-vis other major manufacturing economies. The ministry said that the PLI scheme for IT hardware is expected to result in broadening and deepening of the manufacturing ecosystem by encouraging the localisation of components and sub-assemblies and allowing for a longer duration to develop the supply chain within the country.

According to CNBC: The scheme is part of India’s efforts to attract global manufacturers to diversify their production bases away from China, especially in the electronics sector. India is the world’s second-largest smartphone market and has already attracted companies such as Apple supplier Foxconn and South Korea’s Samsung to set up factories in the country.

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