India wants to become global hub of electronic manufacturing, approves $1-bn plan to boost export of IT goods

Ravi Shankar Prasad
India's plan to boost local manufacturing is part of a production-linked incentive (PLI) plan and will help the export of IT goods

India has given a go-ahead for a plan to boost local manufacturing and IT exports. As part of the plan, the government will be spending USD 1.02 billion. Also Read: Govt approves PLI scheme for manufacturing of telecom, networking products in India

Broad View: According to Ravi Shankar Prasad, India’s plan to boost local manufacturing is part of a production-linked incentive (PLI) proposal that will aid the export of IT goods worth 2.45 trillion rupees. Manufacturers are also entitled to cash-backs of between 1%-4% of additional sales of locally made goods over four years, with 2019-2020 as the base year. Also Read: Amazon India to start its first manufacturing facility in Chennai

  • The production-linked incentive plan is also likely to make it easier for iPhone-maker Apple Inc to assemble some of its iPad tablets in India.
  • Due to PLI, Apple suppliers Foxconn and Wistron can now expand in India. The policy push has also driven Pegatron, another Taiwanese electronics manufacturing company, to set up a base in India
  • Foxconn, Wistron and Pegatron committed to investing roughly $900 million to make iPhones in India as part of a PLI plan
  • PLI scheme in IT hardware is expected to lead the total production of  Rs 3,26,000 crore by 5 global champions which contribute 50% towards the world’s market and 10 national champions.

India is the 2nd largest mobile phone maker: Prime Minister Narendra Modi’s policy push is directed towards minimizing imports and replicate the success of smartphone manufacturing. Also Read: India plans sustained human presence in space with proper framework

  • India approved a $1.68 billion plan to promote local manufacturing and export of telecoms and networking gear
  • In India, the compound annual growth rate (CAGR) of electronic manufacturing is 23%. In 2014-15, India’s electronic manufacturing was Rs 1,90,366 crore which increased to Rs 5,46,550 crore in 2019-20.

What’re they saying: Cabinet Minister for Communications, Electronics & Information Technology and Law & Justice, Ravi Shankar Prasad said, “The focus of the scheme is to get global champions to India and to make national champions out of local manufacturers”

“PLI is a scheme in which global companies can come to India, invest in India, set up their factories, manufacture, produce, export outside & earn incentives. Now the #Cabinet has approved PLI  for IT Hardware manufacturing which includes laptops, tablets, all-in-one PCs & servers,” Prasad tweeted.

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