Less than two weeks after Indian prime minister Narendra Modi's visit to the US, which won investments from US-based manufacturers, Hewlett Packard Enterprise (HPE) decided to make high-end servers in the South Asian country to capitalize on the huge market as well as the incentive schemes provided to encourage local production of PCs and servers.
Indian media, including Business Standard and The Economic Times, reported that HPE signed an MoU with India-based VVDN Technologies to produce about US$1 billion of high-end servers in VVDN's plant in Manesar, Haryana.
Antonio Neri, president and CEO of HPE, said that India is a strategic market for the company's business, talent, innovation, and now, manufacturing. Customers in India continue to turn to HPE to help them digitally transform.
Ashwini Vaishnaw, union minister for electronics and IT of India, said that the Production Linked Incentive (PLI) for IT hardware 2.0 aims to make India a global hub for electronics system design and manufacturing, and India sees the expansion of large-scale IT hardware manufacturing as a means to enhance and diversify the manufacturing ecosystem.
In May, India's cabinet approved the PLI for IT hardware 2.0, providing INR170 billion (US$2.06 billion) incentives to encourage making notebooks, tablets, all-in-one PCs, servers, and ultra-small form factor devices in India. The revised PLI scheme was aimed at replacing the previous version, which failed to win multinationals' investments to make their products in India.
According to IDC data, except for server ODM service providers (ODM direct), HPE ranked top in terms of India's server market, with sales reaching US$149.85 million in the first quarter of 2023 and up about 30% year-on-year. According to HPE, the partnership with VVDN will support the growing demand in India and diversify HPE's global supply chain.
Mint quoted Som Satsangi, senior vice president and managing direct at HPE India, saying that India is expected to be a US$1 trillion digital economy, and making products in India will help accelerate this vision.
Source: IDC, July 2023
