India introduces IT hardware incentive scheme to attract investment from global tech giants

Us tech giants Dell, Hewlett-Packard and China's Lenovo are among the 27 companies that have been approved for a production incentive scheme to manufacture IT hardware in India, which aims to raise the level of domestic manufacturing and attract large investments along the value chain.

"IT hardware from well-known brands such as Acer, Asus, Dell, HP, Lenovo will be manufactured in India," the Ministry of Electronics and Information Technology said in a statement on Saturday.

Under the IT Hardware PLI Scheme 2.0 approved by the government in May, India will provide incentives for goods manufactured in the country.

The program has a budget of 170 billion Indian rupees (about $2 billion) spread over six years and covers the manufacture of laptops, tablets, all-in-one computers, microcomputers and servers.

"Twenty-three of the 27 approved applicants can start manufacturing on the first day," Ashwini Vaishnaw, minister of Railways, Communications and Electronic Information Technology, told industry leaders and media.

Together, the companies are expected to invest $360 million and create approximately 200,000 jobs, including 50,000 direct jobs and 150,000 indirect jobs. The Indian IT hardware market is expected to grow from $15.52 billion in 2022 to $22.77 billion in 2027.

"The IT hardware manufacturing industry is facing a lack of a level playing field compared to other competing countries...... A mechanism is needed to compensate for the manufacturing disadvantages of other major manufacturing economies, "the Electronics and Information Technology Ministry said.

"The IT Hardware PLI Scheme 2.0 is expected to expand and deepen the manufacturing ecosystem by encouraging localization of components and sub-assemblies and allowing longer time to develop the domestic supply chain," the ministry said.

IT hardware makers such as Apple supplier Foxconn and South Korea's Samsung are increasingly diversifying their production bases outside China, helped by incentives for electronics production and India's position as the world's second-largest smartphone market.