Rising GPU costs and AI server demand push India to rethink its IT hardware incentive scheme, as Altos unveils new products amid soaring memory prices.
The Indian government is considering changes to the Production Linked Incentive (PLI) scheme for IT hardware in response to escalating graphics processing unit (GPU) costs and the growing adoption of artificial intelligence (AI) servers, a senior official said on Monday, March 23, 2026.
According to a report by The Economic Times, Sushil Pal, Joint Secretary at the Ministry of Electronics and Information Technology (MeitY), noted that GPUs now account for nearly 90 per cent of server costs, up from 70 per cent previously. He emphasised the need to assess whether the current PLI framework remains suitable for AI servers, given their distinct requirements and potential for domestic value addition.
The ministry plans to initiate discussions with industry stakeholders.
The PLI scheme was first introduced in 2021 to strengthen domestic manufacturing of laptops, tablets, and servers. Its second iteration, launched in 2023, aimed to expand this ecosystem. However, Pal acknowledged that the role of AI servers had not been fully anticipated at the time.
The remarks came during the launch of Altos Computing’s new AI server portfolio in New Delhi. Jackie Lee, CEO of the Acer Group subsidiary, said the company is targeting $2 billion in revenue from the Indian server market within two years and aims to rank among the country’s top three server brands within three years.
Lee warned that memory prices are likely to remain high for several quarters, with component costs rising by 3–5 per cent weekly due to shortages. He attributed this to major manufacturers reallocating capacity to meet surging demand for high-bandwidth memory. Altos plans to invest in research and development and expand its engineering workforce in India.
Altos India Director Priya Krishnamurthy added that the company’s new AI servers could achieve 60 to 80 per cent local value addition, significantly higher than the industry average of around 20 per cent.
