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Production Linked Incentive Scheme Large Scale Electronic



  Aug 08, 2023

Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing and IT Hardware


1. What is the objective of the Production Linked Incentive (PLI) scheme for Large Scale Electronics Manufacturing?

The PLI scheme aims to boost domestic manufacturing and attract large investments in the electronics sector, specifically mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking, and Packaging (ATMP) units. It seeks to create a level playing field for the domestic electronics hardware manufacturing sector, promote self-reliance, and position India as a global hub for Electronics System Design and Manufacturing (ESDM).
 

2. What are the target segments covered under the PLI scheme?

The PLI scheme initially covered mobile phone manufacturing and specified electronic components. The second round of the scheme extended incentives to the IT hardware sector, including laptops, tablets, all-in-one PCs, servers, and ultra-small form factor devices.
 

PLI for Electronics Manufacturing

India is rapidly emerging as a significant player in the electronics manufacturing industry as the global ecosystem shifts its focus to the country. Over the last eight years, electronics manufacturing in India has experienced consistent growth, with an impressive Compound Annual Growth Rate (CAGR) of 17%. This year, it achieved a major milestone by crossing production figures of approximately Rs 9 lakh crore.
 

3. What incentives are provided under the PLI scheme?

Under the PLI scheme, eligible companies can receive incentives of 4% to 6% on incremental sales (over the base year) of goods manufactured in India and covered under the target segments. The incentives are provided for a period of five years subsequent to the base year in the case of the electronics manufacturing segment and for six years in the case of the IT hardware sector.
 

4. How are the incentives determined for the IT hardware sector under PLI 2.0?

The PLI 2.0 scheme for the IT hardware sector offers incentives ranging from 5% to 3% on incremental sales (over the base year, i.e., 2019-20) of goods manufactured in India and covered under the target segment. The incentives are applicable for a period of six years from either July 1, 2023, April 1, 2024, or April 1, 2025, depending on the choice made by the applicants.
 

5. How will the selection of eligible companies be done under the PLI scheme?

The selection of eligible companies will be based on a comprehensive ranking of all applicants, including global, hybrid (global/domestic), and domestic companies, according to the eligibility criteria outlined in the scheme guidelines.
 

6 What is the expected impact of the PLI scheme on the electronics and IT hardware sector in India?

The PLI scheme is expected to significantly boost electronics manufacturing in India, attract investments, create job opportunities, and enhance India's self-reliance in the electronics sector. It aims to position India as a global player in Electronics System Design and Manufacturing (ESDM) and foster the growth of domestic companies in the IT hardware industry.


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