Production Linked Incentive Scheme – 2.0 for IT Hardware

PLI for IT Hardware: The Production Linked Incentive Scheme 2.0 for IT Hardware is a government initiative in India aimed at promoting domestic manufacturing and incentivizing the production of IT hardware. PLI 2.0 for IT Hardware is also important for UPSC Prelims Exam 2023 and UPSC Mains Exam (GS Paper 2- Indian Economy, Various government schemes for promotion and development of various economic sectors).

PLI for IT Hardware in News

The Production Linked Incentive Scheme 2.0 for IT Hardware, with a budgetary allocation of Rs. 17,000 crore, was approved by the Union Cabinet under the leadership of Prime Minister Shri Narendra Modi.

India’s Electronics Manufacturing Industry

Potential and Importance of Electronics Manufacturing of India are listed below-

• 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

PLI 2.0 for IT Hardware, Key Features

Key features of the Production Linked Incentive scheme (PLI) 2.0 for IT Hardware are given below-

• Scope: PLI Scheme 2.0 for IT hardware covers laptops, tablets, all-in-one PCs, servers and ultra-small form factor devices
• Funding: The budgetary outlay of the PLI 2.0 for IT Hardware scheme is Rs. 17,000 crore
• Tenure: The tenure of the PLI 2.0 for IT Hardware scheme is 6 years

• Expected Outcomes: Expected outcomes of the Production Linked Incentive scheme (PLI) 2.0 for IT Hardware are given below-
  • Expected incremental production is Rs. 3.35 Lakh crore
  • Expected incremental investment is Rs. 2,430 crore
  • Expected incremental direct employment is 75,000

PLI 2.0 for IT Hardware Significance

India is increasingly being recognized as a reliable supply chain partner by global industry leaders. Major IT hardware companies have expressed significant interest in setting up manufacturing facilities in India.

• This trend is reinforced by the robust demand for IT services within the country, facilitated by a strong IT services industry.
• Most majors would like to supply domestic markets within India from a facility situated in India as well as make India an export hub.

Electronic sector, Potential in India

Potential of Indian Electronic Sector are discussed below-

• The domestic market is expected to increase from US$65 billion to US$180 billion over the next 5 years.
• This will make electronics amongst India’s 2-3 top ranking exports by 2026.
• Of the US$300 billion, exports are expected to increase from the projected US$15 billion in 2021-22 to US$120 billion by 2026.

Vision Document on Electronic Manufacturing