New Delhi, Feb 24 (UNI) With a aim to boost domestic manufacturing and attract large investments in the value chain of IT Hardware, the Union Cabinet, chaired by Prime Minister Narendra Modi on Wednesday approved the Production Linked Incentive (PLI) Scheme for Information Technology Hardware such as Laptops, Tablets, All-in-One PCs and Servers.
Briefing the media after the Cabinet meeting, Law and Justice and IT Minister Ravi Shanakar Prasad said that this scheme shall extend an incentive of 4 percent to 2 and half percent on net incremental sales (over base year 2019-20) of goods manufactured in India and covered under the target segment, to eligible companies, for a period of four years.
The scheme is likely to benefit five major global players and 10 domestic champions in the field of IT Hardware manufacturing including Laptops, Tablets, All-in-One PCs, and Servers. This is an important segment to promote manufacturing under AtmaNirbhar Bharat as there is huge import reliance for these items at present, Mr Prasad further said.
The total cost of the proposed scheme will be around Rs 7,350 crore over four years, which includes an incentive outlay of Rs 7,325 crore and administrative charges of Rs 25 crore.
Describing the benefits of the scheme, the Minister said that it will enhance the development of electronics ecosystem in the country. India will be well positioned as a global hub for Electronics System Design and Manufacturing (ESDM) on account of integration with global value chains, thereby becoming a destination for IT Hardware exports.
The scheme has an employment generation potential of over 1,80,000 jobs in both direct and indirect in over four years.
The Scheme will provide impetus to Domestic Value Addition for IT Hardware which is expected to rise to 20 percent to 25 percent by the year 2025, Mr Prasad added.
The vision of National Policy on Electronics 2019 notified on 25.02.2019 is to position India as a global hub for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components, including chip-sets, and creating an enabling environment for the industry to compete globally.
Currently, the laptop and tablet demand in India is largely met through imports valued at US Dollar 4.21 billion and US Dollar 0.41 billion respectively in 2019-20. The market for IT Hardware is dominated by six to seven companies globally which account for about 70 percent of the world's market share.
These companies are able to exploit large economies of scale to compete in global markets. It is imperative that these companies expand their operations in India and make it a major destination for manufacturing of IT Hardware.
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