Electronics industry welcomes PLI scheme, to help establish India as export hub

The government on Wednesday approved a Production Linked Incentive (PLI) scheme for 10 key sectors, including telecom, electronic/technology products and automobiles, taking the total outlay for such incentives to nearly ₹2 lakh crore over a five-year period.

Representational image. (Pixabay)

The government's move to introduce PLI scheme for electronic/technology products will help establish India as an export hub and generate large-scale employment in the country, industry experts said.

The government on Wednesday approved a Production Linked Incentive (PLI) scheme for 10 key sectors, including telecom, electronic/technology products and automobiles, taking the total outlay for such incentives to nearly ₹2 lakh crore over a five-year period.

Electronic/technology products have been allocated a financial outlay of ₹5,000 crore over a five-year period.

The PLI scheme will be implemented by the concerned ministries/ departments. The final proposals of PLI for individual sectors will be appraised by the Expenditure Finance Committee (EFC) and approved by the Cabinet.

Industry body MAIT said India is boldly declaring to the world that it will be a major global hub for electronics manufacturing.

"India will compete with global economies and is willing to take steps to be competitive...Given that the country's electronic consumption is going up in a big way, there is a need to address the situation urgently to avoid the drain on foreign exchange outflow," MAIT Chief Executive Officer George Paul said.

While there are challenges, these announcements reflect that government is willing to provide fiscal support for a limited period of time for export-led manufacturing and domestic consumption, Paul said.

He noted that while a lot of designing of products happens in the country, with India being the design hub to the world's major corporates, the products are manufactured in other parts of the world.

"Now when global manufacturing comes here, we can couple design and manufacturing, which brings advantages as designs can be translated to manufacturing in much shorter cycles," he said, adding that home-grown companies will also get a massive push.

Electronics and IT Minister Ravi Shankar Prasad said after the success of PLI in the mobile phone manufacturing sector, the government today approved PLI for 10 more sectors that will not only boost manufacturing in India but also encourage exports and create jobs.

"Due to persistent encouragement of adoption of digital technologies under #DigitalIndia, India's demand for Laptops and Tablets are rising fast. Production Linked Incentives Scheme for manufacturing of Laptops and Tablets will boost domestic production of these goods," he tweeted.

He pointed out that India is becoming a major data economy of the world.

"We are witnessing global investments in Data Centers in India. PLI for Servers and hardware needed for data centers will cater to this growing need of the data economy," the Minister said.

In an official statement, the government said the PLI scheme will boost the production of electronic products in India.

"India is expected to have a USD 1 trillion digital economy by 2025. Additionally, the government's push for data localisation, Internet of Things market in India, projects such as smart city and Digital India are expected to increase the demand for electronic products," it noted.

Lenovo India CEO and MD Rahul Agarwal said the decision to introduce PLI for laptops is "timely and in the right direction".

"We are confident that it will encourage local manufacturing and further bolster the local PC market, which is already seeing a positive momentum under the current work and learn from home scenarios. Lenovo is committed to local manufacturing with our plant in Puducherry, and we welcome this move by the government," he added.