The Indian government has recently approved the second phase of the Production Linked Incentive (PLI) scheme for IT hardware. This move aims to propel the domestic manufacturing of high-tech electronics, following the success of India’s emergence as the second-largest mobile phone manufacturer globally. The PLI scheme will encompass the production of various electronic devices, including laptops, PCs, servers, and ultra-small form factor devices. By transitioning from import substitution to catering to global demand, India seeks to solidify its position in the global value chain and further strengthen its electronic and IT hardware industry.
The Significance of the IT Hardware Sector in India:
In recent years, the electronics manufacturing sector in India has witnessed consistent growth, boasting a compound annual growth rate of 17% over the past eight years. The annual production of electronics in India has surpassed ₹9 lakh crore, highlighting its increasing prominence as a major manufacturing hub. With the global electronics manufacturing ecosystem shifting its focus to India, the country has emerged as a significant player in the sector. This transition has been driven by India’s efforts to capitalize on the global disillusionment with China’s manufacturing industry, presenting a golden opportunity for India to attract tech giants and boost domestic production.
The Success of the Previous PLI Scheme:
India’s initial PLI scheme played a pivotal role in establishing a robust foundation for smartphone manufacturing, attracting investments from major companies such as Apple. By offering incentives to manufacturers, the scheme incentivized domestic production and reduced dependence on imports. Building upon this success, the PLI 2.0 scheme aims to replicate this model in the IT hardware sector.
Objectives and Expected Outcomes of the PLI Scheme:
The primary objective of the PLI scheme for IT hardware is to accelerate domestic manufacturing and enhance India’s presence in the global value chain. The scheme is expected to achieve the following outcomes:
- Boost Production: The PLI scheme targets production worth ₹3.35 lakh crore over a six-year period, contributing to the growth of the IT hardware industry in India.
- Attract Investments: The scheme aims to draw in new investments worth ₹2,430 crore, creating an environment conducive to the expansion of the IT hardware manufacturing ecosystem.
- Generate Employment: By promoting domestic manufacturing, the PLI scheme is projected to create approximately 75,000 new job opportunities in the IT hardware sector.
Incentives and Benefits:
Under the PLI scheme, eligible companies will receive incentives of up to 5% on their incremental sales. Additionally, an optional incentive of 4% will be provided to companies that utilize domestically-produced components. These incentives aim to encourage companies to invest in domestic manufacturing and foster the growth of the IT hardware industry.
Important Points:
- The Indian government approved the second phase of the Production Linked Incentive (PLI) scheme for IT hardware. 💼
- The PLI scheme aims to accelerate domestic manufacturing of high-tech electronics such as laptops, PCs, servers, and ultra-small form factor devices. 📱💻🖥️
- India is transitioning from import substitution to catering to global demand in the IT hardware sector. 🌍
- The PLI scheme is expected to add production worth ₹3.35 lakh crore, attract new investments worth ₹2,430 crore, and generate 75,000 new jobs over a six-year period. 💰💼👩💼👨💼
- Electronics manufacturing in India has witnessed a 17% compound annual growth rate over the past eight years, with annual production exceeding ₹9 lakh crore. 📈💻💰
- India is emerging as a major electronics manufacturing country, attracting the global electronics manufacturing ecosystem. 🌍🔌
- India has capitalized on global disillusionment with China’s manufacturing industry to position itself as a favorable destination for tech giants. 🇮🇳🔌
- The previous PLI scheme for smartphones helped establish India as the second-largest mobile phone manufacturer globally, attracting investments from companies like Apple. 📱🍏
- Under the new PLI scheme, companies will receive incentives of up to 5% on incremental sales and an additional 4% if they use domestically-produced components. 💰📈🏭
- The PLI scheme aims to boost production, attract investments, and generate employment in the IT hardware sector, contributing to India’s presence in the global value chain. 📈💼👩💼👨💼🌍
Why In News
In a major development, the Central Government has given its approval for a Rs. 17,000 crore Production Linked Incentive (PLI) scheme specifically designed for the IT hardware sector. This scheme aims to boost domestic manufacturing, attract investments, and promote the production of IT hardware such as laptops, tablets, personal computers, and servers, contributing to the government’s vision of a self-reliant and globally competitive electronics ecosystem in India.
MCQs about India’s PLI Scheme
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What is the primary objective of India’s PLI scheme for IT hardware?
A. Encouraging import substitution
B. Accelerating domestic manufacturing
C. Fostering global demand
D. Attracting foreign investments
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Which sector has witnessed consistent growth with a compound annual growth rate of 17% over the past eight years in India?
A. Automobile manufacturing
B. Textile industry
C. IT hardware sector
D. Agriculture
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What types of high-tech electronics are covered under India’s PLI scheme for IT hardware?
A. Smartphones and tablets
B. Laptops, PCs, and servers
C. Televisions and home appliances
D. Wearable devices and gaming consoles
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