Dell, Wistron, Foxconn, Lava filed application under PLI scheme for IT hardware

As per Ministry of Electronics and IT (MeitY) statement, many companies which includes Dell, Wistron, Rising Stars Hi-Tech (Foxconn), and Lava have applied for the Production Linked Incentive Scheme (PLI) for IT hardware worth Rs 7,325 crore, which was notified on March 3, 2021.

Also, 14 companies have filed applications under the domestic companies category which include Dixon, Infopower (JV of Sahasra and MiTAC), Bhagwati (Micromax), Syrma, Orbic, Neolync, Optiemus, Netweb, VVDN, Smile Electronics, Panache Digilife, HLBS, RDP Workstations, and Coconics.

The scheme ended on April 30, 2021, while incentives will be applicable from April 1, 2021.

Ravi Shankar Prasad, the Union Minister of Telecom and IT, and Law and Justice has termed the PLI scheme for IT hardware as a “huge success” in the context of the applications received from domestic as well global companies engaged in manufacturing of electronics and hardware devices.

“We are optimistic and looking forward to building a strong ecosystem across the value chain and integrating with the global value chains, thereby strengthening the electronics manufacturing ecosystem in the country,” Prasad said in a statement.

Notably, the PLI scheme which covers laptops, tablets, all-in-one personal computers (PCs), and servers will offer an incentive of 1%-4% to companies considering FY 2019-20 as the base year.

As per the scheme guidelines, the global companies need to invest Rs 500 crore and achieve incremental sales of Rs 1,000 crore in the first year, Rs 2,500 crore in the second year, Rs 5,000 crore in the third year, and Rs 10,000 crore in the fourth year.

For the domestic companies, the investment should be Rs 20 crore, while incremental sales targets are Rs 50 crore, Rs 100 crore, Rs 200 crore, and Rs 300 crore in four successive years.

Over the next 4 years, the scheme is expected to create a production value of Rs 1,60,000 crore. Out of which, IT hardware have proposed production of over Rs 1,35,000 crore, and domestic companies have proposed production of over Rs 25,000 crore.

The scheme further aims to enhance exports significantly. Out of the total production of Rs 1,60,000 crore in the next 4 years, more than 37% will be contributed by exports of the order of Rs 60,000 crore, according to the release.

The scheme is also expected to bring an additional investment in electronics manufacturing of upto Rs 2,350 crore.

Approximately, the scheme will generate 37,500 direct employment opportunities in the next 4 years along with the creation of additional indirect employment, according to the statement.

Domestic value addition is expected to grow from the current 5-12% to 16-35%.