PLI Scheme for IT Hardware
4.9
Production Linked Incentive (PLI) Scheme for IT Hardware
The Production Linked Incentive (PLI) Scheme for IT Hardware has the goal of turning India into a manufacturing hub for high technology IT products and components; especially focusing on laptops, tablets and servers. The PLI Scheme for IT Hardware targets domestic production and encourages local manufactures and suppliers to produce cheap products to meet the increased demand in domestic as well as in the export markets. The PLI Scheme for IT Hardware enables the reduction of reliance on imports and enhances the competitiveness of the IT hardware industry in India and fosters technological upgrades, innovations, and efficiency of the supply chain. Also the PLI Scheme for IT Hardware encourages both domestic and foreign investments in the sector and fosters innovation in the IT hardware industry.
What is the PLI Scheme for IT Hardware?
The Production Linked Incentive (PLI) Scheme for IT Hardware aims to build the manufacturing ecosystem of Next Generation IT Products such as Laptop, Tablets, Server and other IT Hardware products while boosting the productivity of the IT Hardware Industry. The PLI Scheme for IT Hardware seeks to attain the objective of increasing the domestic production and exportation of IT high-tech hardware in India through the reduction of import dependency.
Rewarding firms with competitive incentives to invest in relatively new technologies and processes, the PLI Scheme for IT Hardware helps build a healthy and competitive domestic IT hardware ecosystem. PLI Scheme for IT Hardware also promotes to become a pioneer in creating new solutions, employment, and builds India as a global center for IT hardware manufacturing for creating a robust and progressive digital economy
Benefits of PLI Scheme for IT Hardware
The Production Linked Incentive (PLI) Scheme for IT Hardware provides key advantages to India’s IT hardware manufacturing sector:
- Strengthen Infrastructure: The PLI Scheme for IT Hardware enables financial commitments for the creation of advanced hardware manufacturing factories, supply chain development, and necessary transportation systems.
- Attract Investments: The PLI Scheme for IT Hardware allows both domestic and foreign investments to kick-start in the region, enhancing competitiveness in the value chain to create an independent IT hardware production sector in India.
- Enhance Export Competitiveness: With the help of incentive-based PLI Scheme for IT Hardware, the government facilitates the use of superior technologies and quality goods to increase export competitiveness of IT hardware products.
- Promote Domestic Manufacturing: The PLI Scheme for IT Hardware incurs the “making” of core IT hardware parts and the development of Laptop, Tablet, Server and other Electronics to develop an independent manufacturing ecosystem.
- Job Opportunities: The PLI Scheme for IT Hardware aims at generating employment opportunities in both manufacturing executive as well as related services including research and development and innovation of IT Hardware.
Incentives under PLI Scheme for IT Hardware
The following table provides the expected annual ceiling on the net incremental sales of manufactured goods per company under the PLI Scheme for IT Hardware:
| Financial Year | IT Hardware Companies (Rs Crore) | Domestic Champions (Rs Crore) |
|---|---|---|
| Year 1 (FY 2021-22) | 3,000 | 300 |
| Year 2 (FY 2022-23) | 7,500 | 600 |
| Year 3 (FY 2023-24) | 15,000 | 1,600 |
| Year 4 (FY 2024-25) | 30,000 | 2,400 |
| Total | 55,500 | 4,900 |
Eligibility for PLI Scheme for IT Hardware
The following tables reflect the eligibility criteria for each category based on their incremental sales of manufactured goods under the PLI Scheme for IT Hardware.
| Category | Proposed Incentive Rate | Incremental Investment after 31.03.2021 | Net Incremental Sales of Manufactured Goods over Base Year |
|---|---|---|---|
| IT Hardware Companies(i) Laptops (Invoice value of Rs 30,000 and above), (ii) Tablets (Invoice value of Rs 15,000 and above), (iii) All-in-One PCs (iv) Servers | Year 1: 4% Year 2: 3% Year 3: 2% Year 4: 2% / 1% | Rs 500 Crore over 4 Years Cumulative Minimum(Rs Crore): Year 1: Rs 50 Crore Year 2: Rs 150 Crore Year 3: Rs 300 Crore Year 4: Rs 500 Crore | Year 1: Rs 1,000 Crore Year 2: Rs 2,500 Crore Year 3: Rs 5,000 Crore Year 4: Rs 10,000 Crore |
| Domestic Companies(i) Laptops (ii) Tablets (iii) All-in-One PCs (iv) Servers | Year 1: 4% Year 2: 3% Year 3: 2% Year 4: 2% / 1% | Rs 20 Crore over 4 Years Cumulative Minimum(Rs Crore): Year 1: Rs 4 Crore Year 2: Rs 8 Crore Year 3: Rs 14 Crore Year 4: Rs 20 Crore | Year 1: Rs 50 Crore Year 2: Rs 100 Crore Year 3: Rs 200 Crore Year 4: Rs 300 Crore |
- Eligibility Threshold: The disbursement of incentives depends on the incremental investment and the net incremental sales, as computed relative to the base year.
- Ownership of Domestic Companies: Domestic companies have been defined as organizations where over half the share or stake has beneficial Indian residents or Indian organizations that are ultimately being owned and controlled by Indian residents based on the FDI policy circular of 2017.
- Applicability: The Net Incremental Sales of Manufactured Goods excluding the invoice value of goods shall be Cumulative Subject: Net Incremental Sales of Manufactured Goods, irrespective of Invoice Value, shall be taken into consideration.
Conclusion
The Production Linked Incentive (PLI) Scheme for IT Hardware is a strategic intervention for turning the country into a hub for IT hardware manufacturing. Besides, through the encouragement of both domestic and foreign investments, PLI Scheme for IT Hardware prescribes the manufacture of high technology goods such as laptops, tablets, servers to improve Indian competitiveness internationally. The PLI Scheme for IT Hardware not only helps in providing support to infrastructure and removal of import lock in but also assists in encouraging technological development and employment in the Information technology sector. Offer-and-derived from the experience, focusing on incremental sales and investment, the PLI Scheme for IT Hardware is expected to enhance the development of IT hardware manufacturing self-reliance in India and further the growth of the digital economy.
Frequently Asked Questions
What is the PLI Scheme for IT Hardware?
The PLI Scheme for IT Hardware has been launched with the objective to promote the manufacturing of high technology IT products like laptop, tablets, servers and more to promote both local and international investments.
What are the benefits of the PLI Scheme for IT Hardware?
The PLI Scheme for IT Hardware enhances physical capital, investment, export value addition, domestic production and employment in R&D and innovation in the IT Hardware Industry.
What incentives are provided under the PLI Scheme for IT Hardware?
The PLI Scheme for IT Hardware incentives are incremental and are expected at Rs 3,000 crore in Year 1 for IT hardware firms, rising to Rs 30,000 crore in four years for firms and Rs 2,400 crore for domestic champions.
What are the eligibility criteria for the PLI Scheme for IT Hardware?
The eligibility criteria call for specific minimum incremental investments and net incremental sales each year by the participating companies, specific targets are set for IT hardware companies and domestic companies.
PLI Scheme for Other Sectors
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