The Union Telecom Ministry said on Tuesday that 19 companies have applied for the Production Linked Incentive (PLI) scheme for IT Hardware. The scheme was open for applications until April 30, 2021. From April 1, 2021, incentives will be available under the program.
Dell, ICT (Wistron), Flextronics, Rising Stars Hi-Tech (Foxconn), and Lava are among the electronics hardware manufacturing companies that have applied under the category IT Hardware Companies.
Dixon, Infopower (a joint venture between Sahasra and MiTAC), Bhagwati (Micromax), Syrma, Orbic, Neolync, Optiemus, Netweb, VVDN, Smile Electronics, Panache Digilife, HLBS, RDP Workstations, and Coconics are among the 14 companies that have filed applications under the Domestic Companies group.
These companies are expected to significantly expand their manufacturing activities and become national champions in the manufacture of IT hardware.
The Union Minister expressed trust that the PLI scheme and other initiatives to promote electronics manufacturing would help India become a successful destination for electronics manufacturing and offer a boost to AtmaNirbhar Bharat, with demand for electronics expected to rise by a factor of ten by 2025. The Scheme's development of domestic champion companies in electronics manufacturing would offer a boost to local voices while also striving for a global scale.
What is PLI Scheme?
In March of last year, the central government launched a scheme that aims to give companies incentives on incremental sales from goods produced in domestic units in order to improve domestic manufacturing and reduce import bills.
The PLI Scheme provides qualifying companies with a four-year reward ranging from 4% to 2% / 1% on net incremental sales (over the base year of FY 2019-20) of products in target segments produced in India (FY 2021-22 to FY 2024-25).
How does PLS Scheme Benefit?
The Scheme is projected to generate Rs 1,60,000 crore in total output over the next four years. IT Hardware companies have proposed a total production of more than INR 1,35,000 crore, while domestic companies have proposed a total production of more than INR 25,000 crore.
The scheme is projected to have a huge impact on exports. Exports of the order of INR 60,000 crore will contribute more than 37% of the overall output of Rs 1,60,000 crore in the next four years.
In the next four years, the scheme will create approximately 37,500 direct job opportunities, as well as almost three times the amount of indirect job opportunities. Domestic Value Addition is projected to rise from 5-12 percent to 16-35 percent in the coming years.