PRODUCTION LINKED INCENTIVE SCHEME 2.0 FOR IT HARDWARE

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Context: The Government of India has launched the Production-Linked Incentive (PLI) Scheme 2.0 for IT Hardware as part of its vision to make India a global hub for manufacturing and exporting IT products.

Details

• The PLI Scheme 2.0 for IT Hardware is a part of the Atmanirbhar Bharat initiative, which aims to make India self-reliant and resilient in various sectors of the economy.
• It is also in line with the National Policy on Electronics 2019, which envisages creating a conducive environment for the development of the electronics system design and manufacturing (ESDM) industry in India.

Key Features

• The PLI Scheme 2.0 for IT Hardware aims to promote domestic production of IT hardware products such as laptops, tablets, all-in-one PCs, servers and ultra-small form factor (USFF) devices, by offering financial incentives to eligible companies based on their incremental sales and investment performance.
• The scheme also covers the manufacturing of key components and sub-assemblies such as semiconductor design, IC manufacturing, and packaging, which are essential for developing a robust and competitive IT hardware ecosystem in India.
• It will provide an average incentive of around 5% on net incremental sales (over base year) of goods manufactured in India and covered under the target segment, for a period of six (6) years.
• It has been designed to provide flexibility and options for applicants and to encourage the localisation of the value chain within the country.
• It is expected to generate employment opportunities, boost innovation, enhance exports, and contribute to the overall growth of the IT sector in India.

Significances

• It will enhance India's competitiveness in the global market and increase its share in global IT hardware exports.
• It will reduce India's dependence on imports of IT hardware products, which account for a major part of the electronics import bill.
• It will promote the development of a robust IT hardware ecosystem in India, with backward and forward linkages, and foster innovation and R&D in this sector.
• It will generate additional direct and indirect employment and create a multiplier effect on the economy.

Challenges

• Availability of skilled manpower and quality infrastructure for IT hardware manufacturing.
• Compliance with environmental and safety standards and regulations.
• Protection of intellectual property rights and data security.
• Competition from other countries that offer similar or better incentives and support to IT hardware manufacturers.
• Coordination among various stakeholders such as central and state governments, industry associations, academia and research institutions.

Way forward

• Creating a conducive policy environment and simplifying the regulatory framework for IT hardware manufacturing.
• Providing adequate infrastructure support such as power, water, logistics, connectivity and land.
• Developing a skilled workforce and enhancing their capacity through training and education.
• Encouraging innovation and R&D in IT hardware products and processes.
• Strengthening the domestic demand and creating awareness among consumers about the benefits of buying locally made IT hardware products.

Must-Read Articles:

Production Linked Incentive (PLI) Schemes: https://www.iasgyan.in/daily-current-affairs/production-linked-incentive-pli-schemes

PLI for IT Hardware: https://www.iasgyan.in/daily-current-affairs/pli 

 https://pib.gov.in/PressReleasePage.aspx?PRID=1939553 

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