As India doubles down on local manufacturing of electronics hardware, the country saw an investment of Rs 2,595 crore and production worth Rs 67,275 crore under the Production Linked Incentive (PLI) scheme for large-scale electronics manufacturing, of which, 31 per cent or Rs 20,568 crore worth products were exported (till June 2021), the Economic Survey 2021-22 said.

The PLI for large-scale electronics manufacturing was notified on April 1, 2020 which provides an incentive of 4 to 6 percent on incremental sales (over base year) to eligible companies involved in mobile phone manufacturing and manufacturing of specified electronic components, including assembly, testing, marking and packaging (ATMP) units.

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According to the Survey, under the PLI scheme for IT hardware (notified on March 3, 2021) the total sales of manufactured goods in the target segment stood at Rs 503 crore, with Rs 16.50 crore investment (as per Q2 FY21).

The target segment under the PLI scheme includes laptops, tablets, all-in-one PCs and servers.

This PLI scheme extends an incentive in the range of 1 to 4 per cent on net incremental sales (over base year) of goods manufactured in India and covered under the target segment, to eligible companies, for a period of four years.

Recently, the government approved an outlay of Rs 76,000 crore ($10 billion) for the development of semiconductors and display manufacturing ecosystem.

“The government’s intervention to boost this industry has come at a time when the global economy is facing an acute shortage of semiconductors due to severe disruptions in supply chains,” said the Survey.

The PLI and other schemes to boost semiconductors will not only help domestic companies to overcome the challenges posed by Covid-19 but also assist them to become globally competitive, especially in chip making, it added.

Semiconductors are an integral part of modern technology used in automobiles and its components, electronic and medical devices.

The government had notified the National Policy on Electronics 2019 (NPE 2019) scheme to position India as a global hub for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components, including chipsets.