News: 32 tech giants apply for PLI 2.0 scheme bolstering India’s manufacturing hub

Funding & Investment

32 tech giants apply for PLI 2.0 scheme bolstering India’s manufacturing hub

As part of 'AatmaNirbhar' and Make in India initiatives, the government launched the PLI 2.0 scheme to make Indian manufacturers globally competitive, attract investments, enhance exports, integrate India into the global supply chain and reduce dependency on imports.
32 tech giants apply for PLI 2.0 scheme bolstering India’s manufacturing hub

Prime Minister Narendra Modi announced a $2.1 billion financial incentive plan under the PLI 2.0 scheme for tech companies as part of the ‘Make in India’ and ‘AatmaNirbhar’ initiatives in May 2023. Following the announcement, approximately 40 tech companies, including HP, Dell, and Foxconn, had applied under the central government’s scheme as of August 30, 2023.

The scheme, a financial incentive plan, will bolster India’s manufacturing sector for local production of IT hardware such as laptops, tablets, and servers. Moreover, the tech firms applying for this scheme will receive incentives and subsidies for sourcing locally produced components. In addition to this, a cashback of nearly 5% of factory prices of finished products will be provided, as per reports.

In an official announcement, Rajeev Chandrasekhar, the Union Minister of State for Skill Development & Entrepreneurship and Electronics & IT, said, “This is happy news that some of the world’s largest IT companies, such as Dell, HP, ASUS, and Acer, have applied for the PLI 2.0 scheme. This shows their interest in manufacturing computers in India. Prime Minister Shri Narendra Modi reiterated how India is the world’s second-largest manufacturer of smartphones. We aim to achieve the same status in IT hardware, such as laptops, servers, and tablets. The PLI scheme is part of this mission. We are delighted that the scheme has been well-received by the industry. We want the big IT companies to manufacture their products in India and export them from here. This will create job opportunities and attract investments. Under the leadership of Prime Minister Shri Narendra Modi, the government has collaborated closely with startups, industries, and academia to establish a thriving IT hardware manufacturing ecosystem in India. From almost nothing pre-2014, our aim is to build a $300 billion electronics industry and a $1 trillion Digital Economy by 2026. The PLI 2.0 scheme for IT hardware, developed with industry inputs, is a significant mission for India. Today, India is one of the world’s fastest-growing consumer markets in electronics, thanks to our rapid digitization of the economy, government, and public services”

The application window for the incentive scheme closed on August 30, 2023, and approximately 32 of the biggest tech companies have applied under this scheme.

Ashwini Vaishnaw, the Union Minister for Information Technology, shared, “Overwhelming response received for the production of laptops and PCs under the hardware Production Linked Incentive Scheme (PLI) scheme. Companies that will be manufacturing laptops include HP India, Dell, Acer, Lenovo, Thomson and others. Servers will be made by HP Enterprises. India is emerging as a very trusted supply chain partner and also a value chain partner because it has good capabilities in design. The companies could begin production under the plan as soon as early next year. We are likely to see expected incremental production of Rs 3.35 lakh crore. The expected direct employment is going to be 75,000. Production of PCs, laptops, and servers will increase in the months to come. India is emerging as a trusted supply chain partner and value-added partner… companies are happy to come to India for manufacturing and design."

After the success of the incentive scheme launched in 2020, which jump-started the local assembly of smartphones in India, this new incentive scheme aims to attract incremental investment of Rs 34.3 billion. Furthermore, these investments will be converted into additional production output worth Rs 3.35 trillion under India’s sixth-year plan.

Last year, tech giants including Apple's manufacturer, Foxconn, Wistron Corp, and Pegatron Corp strengthened their business operations in India. Apple, in particular, was able to increase its global iPhone output from India by 7% in FY22, however, this time it has opted out of the PLI 2.0 scheme. 

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Topics: Funding & Investment, Technology, #HRCommunity

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