Indian PC vendors to meet production targets by fiscal 2023 under IT hardware PLI

Thanks to a more flexible version of India's incentive policy and an import management system that may restrict computer imports, PC and notebook vendors are reportedly increasing their local production in India.

According to the Hindu BusinessLine, sources said most recipients under India's Production Linked Incentive (PLI) scheme for IT hardware 2.0 are likely to meet their production targets by the end of fiscal 2024 (April 2023 to March 2024). However, sources said some PC and notebook vendors may begin making products covered by the PLI scheme in 2025.

The PLI scheme for IT hardware aims to encourage local production of all-in-one PCs, notebooks, tablets, servers, and ultra-slim form factors. Most of the computers sold in India are imported from overseas, particularly China.

India launched the PLI scheme for IT hardware in 2021, which failed to attract investments from global players for various reasons, including a lack of a local ecosystem and India's FTA with Southeast Asia. India revised the PLI scheme in 2023 by increasing the incentive rate and budget outlay and providing a flexible base year for applicants to choose between 2023, 2024, and 2025. In the first iteration of the PLI scheme, 14 companies, including Foxconn and Wistron, were approved. In the revised version, at least 27 companies, including Dell, HP, and Flex, applied for the scheme.

An import management system implemented in November was seen as a boost for local production of PCs and notebooks. In November, Intel, which decided to designate India as a separate geography in mid-March, announced a partnership with eight Indian EMS providers to manufacture entry-level notebooks in India by helping these partners set up SMT lines and quality control procedures, as well as offering support for SKD and CKD assembly processes.

In January, S. Krishnan, secretary of the Ministry of IT of India, said India needs to reduce costs and set up a supply chain ecosystem to compete globally, adding that India must achieve 40% of local value addition to be resilient.