The Ministry of Electronics & Information Technology (MeitY) has implemented several Production Linked Incentive (PLI) Schemes as part of the National Policy on Electronics (NPE), 2019. These schemes are designed to bolster electronics manufacturing in India, attracting significant investments and setting ambitious production targets.

PLI Scheme for Large Scale Electronics Manufacturing

The PLI Scheme for Large Scale Electronics Manufacturing, initiated on April 1, 2020, has been a major success. The scheme has approved 32 companies with a committed investment of US$ 1.53 billion (Rs. 11,324 crore) and a projected production target of US$ 144.24 billion (Rs. 10,70,000 crore). This initiative aims to make India a global hub for electronics manufacturing, reducing dependence on imports and boosting domestic production.

As of June 30, 2024, the cumulative investment under this scheme reached US$ 1 billion (Rs 8,282 crore), with 7 Greenfield and 25 Brownfield companies participating. Greenfield companies contributed US$ 0.38 billion (Rs. 3,136 crore), while Brownfield companies invested US$ 0.62 billion (Rs. 5,146 crore). This significant investment highlights the scheme's effectiveness in attracting substantial financial commitments from both new and existing manufacturers.

PLI Scheme for IT Hardware

Following the success of the electronics manufacturing scheme, MeitY launched the PLI Scheme for IT Hardware on March 3, 2021. This scheme has approved 14 companies with an investment of US$ 0.34 billion (Rs. 2,517 crore) and a production target of US$ 21.74 billion (Rs. 1,60,751 crore). This initiative aims to strengthen the IT hardware manufacturing sector, supporting the production of laptops, tablets, servers, and other critical IT equipment.

PLI Scheme 2.0 for IT Hardware

To further enhance the IT hardware sector, PLI Scheme 2.0 for IT Hardware was notified on May 29, 2023. This updated scheme has approved 27 companies with a committed investment of US$ 0.36 billion (Rs. 2,955 crore) and a production target of US$ 42.57 billion (Rs. 3,51,647 crore). Notably, 13 companies migrated from the earlier scheme to the new one, demonstrating the ongoing commitment and confidence in India's manufacturing capabilities.

Among the 27 approved companies in PLI Scheme 2.0 for IT Hardware, 6 are Greenfield and 21 are Brownfield. The total investment in both IT hardware schemes stands at US$ 55.84 million (Rs. 464.66 crore), with a distribution of US$ 46.39 million (Rs 386.09 crore) from Brownfield companies and US$ 9.44 million (Rs 78.57 crore) from Greenfield companies. This distribution of investments highlights the active participation of established manufacturers while encouraging new entrants into the market.

Government Support and Future Prospects

This information was provided by the Minister of State for Electronics and Information Technology, Mr. Jitin Prasada, during a Lok Sabha session. He emphasized the government's commitment to supporting the electronics manufacturing sector through these PLI schemes, which are crucial for achieving self-reliance and reducing import dependence.

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The National Policy on Electronics (NPE), 2019 envisions positioning India as a global leader in electronics manufacturing, and these PLI schemes are pivotal in realizing that vision. By providing financial incentives linked to production outcomes, the schemes encourage companies to scale up their manufacturing capabilities and enhance the overall competitiveness of India's electronics industry.

Greenfield and Brownfield Investments

The differentiation between Greenfield and Brownfield investments is significant in understanding the impact of these schemes. Greenfield investments involve setting up new manufacturing facilities from scratch, which requires substantial capital expenditure and infrastructure development. In contrast, Brownfield investments pertain to the expansion or modernization of existing facilities, which can be quicker to implement and may involve lower upfront costs.

The participation of both Greenfield and Brownfield companies indicates a balanced approach, leveraging the strengths of established players while fostering innovation and capacity building through new entrants. This dual approach ensures a robust and resilient electronics manufacturing ecosystem in India.

Conclusion

MeitY's PLI schemes under the National Policy on Electronics (NPE), 2019 are driving substantial growth in India's electronics manufacturing sector. With significant investments and ambitious production targets, these schemes are set to transform India into a global manufacturing powerhouse. The emphasis on critical sectors like large-scale electronics manufacturing and IT hardware reflects the government's strategic vision to achieve self-reliance and position India as a leader in the global electronics market. The ongoing support and participation of both Greenfield and Brownfield companies underscore the collaborative effort to build a sustainable and competitive manufacturing ecosystem.

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