On its part, the industry said that this the best time for global firms to shift their manufacturing base from China to India.
The IT and electronics industry welcomed the government’s announcement on the revised production linked incentive (PLI) scheme for IT hardware by increasing the outlay to over two times to Rs 17,000 crore. With improved incentives and outlay, the government aims to push local manufacturing of IT hardware such as laptops, tablets, desktops, and servers, among other products. On its part, the industry said that this the best time for global firms to shift their manufacturing base from China to India.
“It will ensure investments across the IT hardware value chain, demonstrating the government’s receptiveness to industry inputs and their determination to translate words into action. This is an opportune moment to shift IT hardware manufacturing towards India,” Pankaj Mohindroo, chairman of India Cellular and Electronics Association (ICEA), said.He said that India currently imports a significant portion of laptops and tablets for consumption and this revised PLI scheme will not only foster domestic manufacturing but also benefit major global manufacturers of IT hardware products such as laptops and tablets.
A Gururaj, MD of Optiemus Electronics said: “Optiemus Electronics is manufacturing IT Hardware for many reputed brands under the current PLI and now with the PLI 2.0, we are actively considering and evaluating our options to participate in this new phase of growth in electronics manufacturing”.In the revised scheme, the government has increased the duration of the scheme to six years with a provision to claim incentives in any of the six years, increasing the incentive of the scheme to 5% from 2%, made investments flexible, allowed companies to even include investments made by their suppliers or contract manufacturers, and made provision for additional incentives of 3-4% if the companies use locally manufactured components. Further, there will be flexibility for the scheme beneficiaries in choosing the base year as well.The government will give the companies a 45-day timeline to apply under the revised PLI scheme.
Further, the companies such as Dell, ICT Service (Wistron), Lava, Dixon, Rising Stars Hi-Tech (Foxconn), Netweb Technologies, Optiemus Electronics, among others, who were part of the first phase of IT hardware PLI will be the given the option to migrate to new scheme.”We have learned a lot from our experience in mobile phone, experience in telecom. These two PLIs are very successful and based on these we are able to say today very confidently that this time IT hardware manufacturers are going to come in a big way,” communications minister Ashwini Vaishnaw said.With the revamped version, especially the inclusion of investments made by suppliers, the government is looking to attract US companies particularly Dell, HP and Apple. While Vaishnaw did not name the companies, he said the government is receiving a positive response from the industry largely and the revised scheme has been launched in consultation with them.
The first version of the scheme, launched in March 2021 with an outlay of `7,350 crore, received a lukewarm response from the companies. Only two companies — Dell and Bhagwati — were able to meet FY22 targets. Of the projected investments of `2,500 crore, only Rs 123 crore-worth investments were received. In fact, in the revised scheme, the government has lowered the projected investments to Rs 2,430 crore.”These are tentative projected investment figures, things depend a lot on the environment. In the telecom PLI for instance, expected investment was around `900 crore, but the actual investment was `1,600 crore,” Vaishnaw said.
Electronics manufacturing in India has witnessed growth with a 17% compound annual growth rate (CAGR) in the last eight years.The government is targeting $300 billion worth of electronics production in the country by 2025-26, out of which $120 billion is expected to be exported. Of the total target, IT hardware (laptops, tablets, personal desktops and servers) is expected to contribute $25 billion whereas the IT hardware exports are estimated to reach $12-17 billion by 2025-26.
https://www.financialexpress.com/industry/it-industry-calls-on-global-players-to-shift-base-to-india/3091859/
