Workers inspect smart phone components at the visual inspection area of the surface mount technology workshop inside the Realme factory in Greater Noida, India, on Wednesday, June 1, 2022. Chinas Realme closing in on market leaders Xiaomi, Samsung, yet hurdles loom in treacherous market where many stumbled. Photographer: Anindito Mukerjee/Bloomberg via Getty Images
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U.S. tech giants Dell, HP and China’s Lenovo are among the 27 companies that have received approvals to make IT hardware in India under a production-linked incentive scheme, as the country aims to boost domestic manufacturing and attract large investments in the value chain.
Under the PLI Scheme 2.0 for IT hardware, which was approved by the government in May, India will provide companies incentives for goods manufactured in the country.
“IT hardware of well-known brands such as Acer, Asus, Dell, HP, Lenovo, etc will be manufactured in India,” the Ministry of Electronics and IT said a statement on Saturday.
The scheme has a budget of 170 billion Indian rupees (about $2 billion) spread over six years and covers manufacturing laptops, tablets, all-in-one personal computers, micro PCs and servers.
“23 out of 27 approved applicants are ready to start manufacturing on day zero,” Minister of Railways, Communications and Electronics and IT Ashwini Vaishnaw told industry leaders and media.
The companies are expected to invest $360 million collectively and create about 200,000 jobs, comprising 50,000 direct employment opportunities and 150,000 indirect employment opportunities. The Indian IT hardware market is expected to grow to $22.77 billion in 2027 from $15.52 billion in 2022.
“The IT Hardware manufacturing sector faces the lack of a level playing field vis-à-vis competing nations … There is need for a mechanism to compensate for the manufacturing disabilities vis-à-vis other major manufacturing economies,” according to the ministry.
“The PLI Scheme 2.0 for IT Hardware is expected to result in broadening and deepening of the manufacturing ecosystem by encouraging the localisation of components and sub-assemblies and allowing for a longer duration to develop the supply chain within the country,” said the ministry.
IT hardware manufacturers such as Apple supplier Foxconn and South Korea’s Samsung have increasingly diversified their manufacturing bases outside of China, attracted by incentives for electronics production as well as India being the world’s second-largest smartphone market.