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PLI 2.0 for IT hardware: Make global giants feel safe to manufacture in India, say experts

The IT hardware sector in India is still in a nascent stage and a key factor will be to make global giants like Dell, HP, ASUS, Lenovo, and Acer feel safe to make the country their manufacturing hub, leading industry experts said here on Friday.

New Delhi, Jan 19,2024:  The IT hardware sector in India is still in a nascent stage and a key factor will be to make global giants like Dell, HP, ASUS, Lenovo, and Acer feel safe to make the country their manufacturing hub, leading industry experts said here on Friday.

The revised PLI 2.0 for IT hardware scheme, with its increased budgetary outlay of Rs 17,000 crore and expanded tenure to six years, is expected to generate an incremental production of Rs 3,35,000 crore.

This scheme also aims to create 75,000 direct jobs and over 2,00,000 indirect jobs, thereby significantly boosting employment opportunities in the sector.

“A $290 billion global industry cannot be ignored. Simultaneously, Indian brands also need encouragement and development,” said Pankaj Mohindroo, Chairman, the India Cellular & Electronics Association (ICEA), at an event here.

The event, organised by the ICEA, witnessed the participation of over 100 stakeholders from across the entire IT Hardware value chain, including companies approved under the revised Production Linked Incentive (PLI) 2.0 for IT Hardware.

The IT hardware Industry, which has been languishing as far as domestic manufacturing is concerned, is expected to rise in coming years.

Most of India’s consumption of laptops and tablets is met through the import of CBUs (Completely Built Units), to the tune of $6 billion in FY22-23, primarily from China.

This scenario underscores the critical need for a strategic shift towards bolstering the domestic IT hardware manufacturing capabilities with a view to become globally competitive in exports, said experts.

“Reflecting on our transformative journey in mobile phone production, where we scaled monumental heights, I confidently assert that the IT hardware industry is on the brink of an epochal shift, which will turn the corner from complete import dependence to exports,” said Mohindroo.

S. Krishnan, Secretary, IT Ministry, highlighted how India’s electronics industry has grown like a phoenix from the ashes and is now competing with the world.

“To compete globally, we need to reduce costs and establish a supply chain ecosystem. India must achieve 40 per cent of domestic value addition to be resilient,: said Krishnan.

The government is ambitious and committed, but a lot more consultations with the industry need to occur to understand and resolve the issues, and foster a flourishing ecosystem, he told the gathering.

Sushil Pal, Joint Secretary, MeitY, said that when we talk about scale and competitiveness, our goal should be to target and harness the global market share.

“PLI 2.0 is a well-laid-out strategy that incentivises the domestic supply chain. We have ample capacity for sub-assembly of adapters and more, as well as serious players in the PCB industry now. Therefore, we should start by supplying to brands that are directly dependent on OEMs to achieve these objectives,” Pal emphasised.

The event saw participation from key industry players, including representatives from battery, charger adapter, display panel, bare PCB, chassis/enclosures, add-on controllers, memory modules, and SSD.

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