Majority Of Manufacturers Qualified Under Revised PLI Scheme To Start Production This Year

Majority of manufacturers eligible under the revised production-linked incentive scheme for IT hardware are expected to commence production this year.

“About 17 out of 27 PLI companies will start production from this year. Around 6-7 of them started production last year, and two have plans to start from next year,” ET reported, citing Ministry of Electronics and IT (MeitY) secretary S Krishnan.

The government has already initiated the process, and it has been consistently monitoring the advancement in the IT hardware PLI.

The official added that the government is currently waiting for companies to conduct audits of their production before disbursing the incentives pledged under the scheme.

Last year, the Indian government gave its nod to 27 global IT firms, including Dell, HP India and Lenovo, to manufacture hardware components in the country.

The approval was granted under the new IT hardware production linked incentive (PLI) scheme which covers laptops, tablets, servers and ultra small form factor devices.

Under this scheme, the IT ministry shall offer incentives in the range of 1% to 4% on net incremental sales (over base year) of goods manufactured in India, and covered under the target segment for a period of four years.

“For various reasons including stability and others, it is important that we have domestic capacity, which has been useful in establishing this is a manufacturing exercise that can take place in India, by an Indian company,” Krishnan said

The focus now needs to shift towards enhancing domestic value addition, a facet addressed within the IT Hardware PLI scheme, he added.

Meanwhile, the secretary further emphasised that domestic companies will be given priority in the government’s INR 10,372 Cr India AI Mission, which aims to foster the development of artificial intelligence models and applications within India.

“The AI mission doesn’t involve manufacturing so much. It is about providing access to GPU (graphics processing unit) resources, so of course, wherever possible, domestic providers will get preference, but we will have to work on that,” Krishnan said.

He added that government agencies procure more than 50% of the high-performance computers manufactured in India.

Last month, the cabinet approved the IndiaAI Mission with an allocation of INR 10,372 Cr over the course of next five years.

The funds will be used to foster innovation in the homegrown AI ecosystem and implement the Mission’s vision via a public-private partnership (PPP) model. The government said that a part of the outlay will also be utilised to facilitate funding for emerging AI startups and spur innovation in the sector.