Union Cabinet Approves PLI Scheme For IT Hardware

The Union Cabinet approves a new Production Linked Incentive (PIL) Scheme with a budget Rs 17,000 crore for IT Hardware. The overall tenure of this PLI 2.0 scheme will be six years, with an expected incremental production value of Rs 3.35 Lakh crore. It is a PLI 2.0 in which the cabinet increases the budget from Rs 7,500 crore to Rs 17,000 crore compared to the previous PLI scheme. 

During a media briefing, Ashwini, Vaishnaw, Minister of Electronic And Information Technology, said, “The scheme will cover laptops, tablets, all-in-one personal computers, servers and ultra-small form factor devices, and will create an incremental investment of Rs 2,430 crore and additional direct employment for 75,000 people.”

Ashwini also added that the benchmark of electronic production in India would cross $105 Billion (approx Rs 9 lakh crore), and PLI 2.0 scheme will play a significant role in it. The earlier version of the PLI scheme for IT hardware offered a low incentive which was 2%, whereas the base incentive offered during PLI 2.0 scheme would be 5%.

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This PLI scheme will allow applicants to choose a base year from 2023, 2024 or 2025 to start production and request an incentive of up to 5% on the incremental sales. It also covers servers and personal computers and offers benefits to Indian and Global companies like Dell, Dixon, Foxconn, etc.

In April 2020, the Union Cabinet launched the first PLI scheme focusing on mobile phone production. This PLI scheme benefited the Indian mobile phone production industry and generated over Rs 90,000 crore from mobile phone export in March.

The approval of PLI 2.0 for IT hardware demonstrates the central government’s commitment towards boosting the electronic manufacturing sector.

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