Is India solidifying its world rank in mobile and laptop manufacturing? The success of the PLI scheme is fuelling this goal, as the country cuts down its import dependence on China, claim the government and the industry.
India’s production-linked incentive (PLI) scheme has successfully attracted more than $17 billion in investments since its launch in 2020, according to a government official’s statement on Wednesday. As an Economic Times report stated, this scheme, with its aim to boost domestic manufacturing, is gradually reducing reliance on imports from China.
The PLI scheme provides 4-6% cash incentives on incremental sales to manufacturers across 14 sectors, including electronics, pharmaceuticals, textiles, and white goods. According to Amardeep Singh Bhatia, Secretary of the Department of Promotion of Industry and Internal Trade, the scheme has been successful in garnering investments.
Owing to its current manufacturing capability, Bhatia stated that India has emerged as a significant player in global electronics manufacturing, particularly in the smartphone sector, now ranking as the second-largest producer of mobile phones.
He especially cited that Apple’s iPhone exports alone surpassed $12 billion in the fiscal year 2023-24, which ended in March.
Moreover, the incentives have led to production valued at approximately 11 trillion rupees ($131.6 billion) and created nearly one million jobs over the past four years. According to ET, following its success in reducing mobile imports from China, India plans to enhance the production of laptops, tablets, computers, and servers.
Recently, the government extended the ‘import management system’ by three months. Launched in November 2023, this system requires companies to register their laptop and tablet imports, indicating a clear intent to cut imports, especially from China.
India’s IT hardware market, which includes laptops, is estimated at nearly $20 billion, with around $5 billion generated from domestic production, according to Mordor Intelligence. After reconsidering an earlier import licensing regime, the government introduced a new system for laptops, tablets, personal computers, and servers.
In the first phase of the PLI scheme, the government approved incentives for 27 IT hardware manufacturers, including Acer, Dell, HP, and Lenovo. These manufacturers are expected to generate about $42 billion in production over the coming years.
Experts believe that India has a strong case for building its own laptop manufacturing capabilities, noting that China accounted for over $9 billion in imports in the 2023-24 fiscal year.
The demand for laptops and other devices in India is also rising locally due to increasing incomes, expanding business activities, and educational needs, favouring local manufacturing. Dixon Technologies has qualified for the incentive scheme among local manufacturers and aims to meet 15% of India’s domestic demand by fiscal year 2025-26.
