Synopsis
By 2026-27, India's ambitious incentive scheme for IT hardware production may undergo significant revisions. With discussions underway to potentially include AI servers and their hardware counterparts, the program looks poised for expansion. Anticipation rises as incentive payouts are projected to soar, with government officials poised to evaluate the scheme’s effectiveness before making any alterations.Listen to this article in summarized format
The Rs 17,000 crore production linked incentive (PLI) scheme for information technology (IT) hardware may be modified in late FY27 (2026-27), after major disbursements kick off and component manufacturing rises, officials told ET. Artificial intelligence (AI) servers and other AI-linked hardware products are slated to be extended coverage under the scheme then, they said.
"The incentive payout under the IT Hardware PLI 2.0 is expected to significantly rise in the second half of FY27, from just Rs 82 crore so far. Claims will rise this year as 80% of the participants had chosen FY25 as the first year of production, and their claims will begin clearing. Subsequently, the progress of the scheme will be assessed, and any required modifications put in place," an official with the Ministry of Electronics and Information Technology (MeitY) said.
The first PLI scheme for IT hardware was notified in 2021, while the second iteration currently in place was notified in 2023 to create a robust domestic manufacturing ecosystem for hardware including laptops, tablets, PCs and servers.
The 27 approved applicants for the PLI Scheme 2.0 for IT Hardware includes global tech giants like Dell, HP, Foxconn, Lenovo and Asus, as well as domestic contract manufacturers Dixon Technologies, Sahasra Electronic Solutions, Kaynes Electronics, and Syrma SGS Technology.
Companies file claims based on the incremental sales over the base year they have chosen.
Most global giants had opted for FY25 as the first year, to ensure enough time for transitioning supply chains from China and South East Asia.
