Since the beginning of the production-linked scheme in 2020, India's cash incentives to stimulate domestic manufacturing have drawn nearly USD 17 billion in investment, according to a government official on Wednesday, as attempts to limit imports from China continue. The plan, which provides producers with 4-6 percent cash incentives on increased sales, was implemented in 14 categories, including electronics, medicines, textiles, and white goods.
"The PLI scheme has been effective in attracting investments and boosting manufacturing," said Amardeep Singh Bhatia, Secretary of the Department of Promotion of Industry and Internal Trade. According to him, India has emerged as a global powerhouse for electronics production, notably smartphones, and is now the world's second-largest producer of mobile phones, with iPhone exports topping $12 billion in the fiscal year 2023/24, which ends in March.
Over the course of four years, the incentives resulted in almost Rs 11 trillion ( USD 131.6 billion) in production and roughly one million jobs, he stated. After cutting mobile imports from China by attracting global firms such as Apple, India wants to increase production of laptops, tablets, PCs, and servers, according to official sources. On Tuesday, the government extended by three months the "import management system," which was established in November 2023 and compels firms to track laptop and tablet imports.
"We have signaled to the industry that we want to reduce imports, particularly from China," one of the government's official sources stated. According to Mordor Intelligence, India's IT hardware market, which includes laptops, is predicted to be worth almost $20 billion, with nearly $5 billion in domestic production.
India unveiled the new system for laptops, tablets, personal computers, and servers after abandoning a previous intention to impose a licensing regime, which would have required Apple, Dell, and HP to get licenses for sales of imported laptops and tablets.
In the first phase, the government granted incentives for 27 IT hardware firms, including Acer, Dell, HP, and Lenovo, to manufacture in India, with production expected to reach $42 billion in the coming years, according to government officials.
"India has a strong case for building its own laptop manufacturing capabilities," said Ajay Srivastava, creator of Global Trade Research Initiative (GTRI), a Delhi-based think tank, noting that China contributed heavily to these imports valued at more than $9 billion in 2023/24.
Rising earnings, expanded economic activity, and education in India have increased demand for laptops and other devices, promoting local manufacture.
Dixon Technologies, a local electronics firm, has qualified for the incentives plan and expects to supply 15% of India's domestic demand by fiscal year 2025/26. "Dixon plans to create a capacity of 2 million units by FY26, which will meet 15% of India's total requirement," Prithvi Vachani, Executive Director of Dixon Technologies, told a credible source.
"Dixon, which has separate agreements with global corporations such as HP to manufacture laptops and computers in India, will secure manufacturing components domestically "in time to come," Vachani added.
