Govt approves Rs 17,000 crore-IT Hardware PLI Scheme 2.0 to enhance production of electronics, smartphones

The Indian Cabinet, headed by Prime Minister Narendra Modi, has given its approval for the Production Linked Incentive Scheme 2.0 (PLI Scheme 2.0) for IT Hardware. The scheme, with a budgetary outlay of Rs 17,000 crore, aims to boost the manufacturing of IT hardware in the country. This move comes as the electronics manufacturing industry in India has been experiencing consistent growth, with a compound annual growth rate of 17 per cent over the past eight years, reaching a production milestone of $105 billion (approximately Rs 9 lakh crore) this year.

The Union Minister for IT and Telecom, Ashwini Vaishnaw, stated in a press briefing after the cabinet meeting that the PLI Scheme 2.0 for IT hardware will encompass various products such as laptops, tablets, all-in-one PCs, servers, and ultra-small form factor devices. The scheme has a tenure of six years and an allocated budget of Rs 17,000 crore.

It is anticipated that the PLI Scheme 2.0 will result in incremental production worth Rs 3.35 lakh crore, incremental investment of Rs 2,430 crore, and the creation of approximately 75,000 direct employment opportunities during the scheme's duration. This expansion of the PLI Scheme follows the previous approval of a similar scheme for IT hardware in February 2021, which had an outlay of Rs 7,350 crore.

Industry players in the IT hardware sector had urged the government to increase the outlay for the PLI Scheme, highlighting the potential for growth and the need for support. The PLI Scheme, initially launched in April 2020 with a focus on mobile phone production, has played a crucial role in bolstering electronics manufacturing in India. As a result of the PLI, India has become the world's second-largest manufacturer of mobile phones, and exports of mobile phones exceeded USD 11 billion (approximately Rs 90,000 crore) in March.

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The successful implementation of the PLI Scheme has attracted the attention of the global electronics manufacturing ecosystem, positioning India as a significant player in the industry. With the approval of PLI Scheme 2.0 for IT hardware, the government aims to further capitalize on the success of the earlier scheme and foster the growth of IT hardware manufacturing in the country.

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