ICEA urges global, Indian manufacturers to leverage revised PLI plan for IT hardware

Industry body India Cellular and Electronics Association (ICEA) has called on global and domestic supply chain stakeholders to capitalise on the revised Production-linked incentive scheme for IT hardware, adding that the industry and the nation will no longer endure the ramifications of a stunted domestic manufacturing sector in IT hardware.

With a substantial budgetary outlay of more than USD 2 billion, the revised scheme heralds a significant pivot towards bolstering the IT Hardware manufacturing landscape in India, opening the doors for global and domestic supply chains to establish or expand their manufacturing bases in this vibrant market, the association said.

The government has received 40 applications from both global and domestic manufacturing companies to produce IT hardware under the revised scheme announced in May 2023.

This includes global companies such as HP and Dell, along with local manufacturers such as Dixon Technologies, Optiemus Electronics, Bhagwati Products (Micromax), and others. Missing in action, however, are Apple and Samsung which together have made the smartphone PLI scheme a success by boosting exports.

“In the initial years, PLI approved firms will hone in on final assembly and PCBA, with a standalone PLI percentage tapering from 3% to 2% and then to 1%; yet, by building domestic capabilities in supply chain, they not only retain a 3% incentive but have the prospect to augment to more than 8%, catalysing a mutually beneficial landscape for PLI firms, the supply chain, and the nation as capacities for sub-assemblies/components burgeon,” ICEA chairman Pankaj Mohindroo said.

The revised scheme promises an average 5% incentive over a period of six years, alongside incentives for localising sub-assemblies and components.

“The detailed incentives for localization of key components and sub-assemblies, including Bare PCB, Memory Modules, Display Panel, Power Adapter, and Battery, among others, are tailored to significantly lower the entry barriers for manufacturers,” Mohindroo added.

The PLI 2.0 scheme encompasses IT hardware items including laptops, tablets, all-in-one PCs, servers, and ultra-small form factor devices, aligning with the trajectory of achieving USD 25 billion in IT hardware production with exports projected between USD 12-17 billion by 2025-26, the association said, adding that it is conduit for for positioning India as a compelling hub for IT hardware manufacturing amidst a shifting global manufacturing landscape.