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DAILY NEWS ANALYSIS

  • 02 July, 2021

  • 15 Min Read

Production Linked Incentive Scheme (PLI) for IT Hardware

Production Linked Incentive Scheme (PLI) for IT Hardware

  • Under the leadership of Prime Minister Shri Narendra Modi and his visionary initiatives like the “Digital India” and “Make in India” programmes, India has witnessed an unprecedented growth in electronics manufacturing in the last five years.
  • The National Policy on Electronics 2019 envisions positioning India as a global hub for Electronics System Design and Manufacturing (ESDM) by focusing on size and scale, promoting exports and enhancing domestic value addition by creating an enabling environment for the industry to compete globally.

National Policy on Electronics, 2019

Mission and Objective

  • The Policy envisions positioning India as a global hub for Electronics System Design and Manufacturing - (ESDM) by promoting domestic manufacturing, skill development, start-up, export eco-system and improving ease of doing business for the ESDM industry.
  • It aims to achieve a turnover of $400 billion and generate 1 crore jobs in the ESDM sector by 2025.

Provisions

  • Creating eco-system for globally competitive ESDM sector- by encouraging domestic manufacturing through consistent tax incentives, establishing Electronic
  • Manufacturing Clusters, promoting Defence Offsets and sub-sectors like semi-conductor facilities, display fabrication units etc.
  • Developing and Mandating Standards in the sector- which would include institutional mechanism for participation of all stakeholders (Govt, Industry, Academia, Experts) and mandatory compliance in the field of electronics goods, including cyber security.
  • Promoting Ease-of-doing Business- by facilitating single window mechanism for global investors using existing mechanisms like Invest India, National Investment Promotion and Facilitation Agency.
  • Encourage Industry-led R&D and Innovation- in all sub-sectors of electronics. This would encompass support to various initiatives in areas like 5G, IoT/ Sensors, Artificial Intelligence etc.
  • Human Resource Development- by generating research base at Ph.D. level, opportunities for joint IPRs to Indian candidates at foreign institutions, and work closely with all agencies (Centre and State).
  • Export Promotion- by providing attractive package of incentives so that exporters can compete in global markets.
  • Promote Trusted Electronics Value Chain- to improve national cyber security profile and control its supply chain across national defense and critical national infra like energy grids, digital economy etc.
  • Promote Cyber Security- by enhanced understanding of cyber security issues, risks; development of testing facilities, photonics, nano-based devices etc by the start-ups.
  • Developing Core Competencies in the sub-sectors of Electronics- such as Indian Fabless Chip Design Industry, Medical Electronic Devices Industry, Automotive Electronics Industry, Power Electronics for Mobility and Strategic Electronics Industry.
  • Promotion of Electronic Components Manufacturing Ecosystem- by providing incentives for lithium-ion cells, chip components, fuel cells, optical fibre, solar cells etc.
  • Promotion of Electronics Manufacturing Services (EMS) Industry- including Engineering & Design of PCBs, Functional testing, Maintenance services like warranty and repair services etc.
  • Mega Projects- by providing special package which would invite extremely high-tech and huge investments in areas like semiconductor facilities, display fabrication etc.

Production Linked Incentive Scheme (PLI) for IT Hardware

  • Ministry of Electronics and Information and Technology (MeitY) has approved 14 eligible applicants under the Production Linked Incentive Scheme (PLI) for IT Hardware.
  • PLI Scheme for IT Hardware notified on 3rd March 2021, extends an incentive of 4% to 2%/1% on net incremental sales (over base year of FY 2019-20) of goods under target segments that are manufactured in India to eligible companies, for a period of four years (FY2021-22 to FY 2024-25).
  • The target segments under the PLI Scheme for IT Hardware include Laptops, Tablets, All-in-One Personal Computers (PCs) and Servers.
  • The scheme proposes production linked incentives to boost domestic manufacturing and attract large investments in the value chain of these IT Hardware products.
  • Four companies have been selected under the category IT Hardware Companies which include Dell, ICT (Wistron), Flextronics and Rising Stars Hi-Tech (Foxconn).
  • Under the category of Domestic Companies, 10 companies namely Lava International Limited, Dixon Technologies (India) Limited, Infopower Technologies (JV of Sahasra and MiTAC), Bhagwati (Micromax) Neolync, Optiemus, Netweb, Smile Electronics, VVDN and Panache Digilife have been approved.

Advantages of PLI Scheme on IT Hardware

  • The scheme will generate an additional direct employment opportunities of more than 36,000 in next 4 years along with creation of additional indirect employment of nearly 3 times the direct employment.
  • Domestic Value Addition is expected to grow from the current 10-15% to 25-30%.
  • PLI Schemes will help in making India a globally competitive destination for electronics manufacturing and create domestic champions to further our mission of achieving an AtmaNirbhar Bharat.

National Software Products Policy

Missions of the Policy

  • To promote the creation of a sustainable Indian software product industry, driven by intellectual property (IP), leading to a ten-fold increase in share of the Global Software product market by 2025.
  • To nurture 10,000 technology startups in software product industry, including 1000 such startups in Tier-II and Tier-III towns & cities and generating direct and in-direct employment for 3.5 million people by 2025.
  • To create a talent pool for software product industry through
    1. Up-skilling of 10 lakh IT professionals
    2. Motivating 1 lakh school and college students
    3. Specialise 10,000 professionals that can provide leadership.
    4. To build a cluster-based innovation driven ecosystem by developing 20 sectoral and strategically located software product development clusters.
    5. For the implementation of this policy, National Software Products Mission will be set up with participation from Government, Academia and Industry.
  • Promoting Software Products Business Ecosystem by
  1. Creation of an Indian Software Product Registry will act as a common pool of Indian Software Products thereby providing a trusted trade environment.
  2. Facilitating active participation of software companies in Capital Market.
  3. Creation of a Single Window Platform.
  4. Evolving a Classification System for Indian Software Products.
  • Promoting Entrepreneurship & Innovation for Employment by
  1. Initiating a programme of incubation- to provide all kinds of support so as to nurture at least 10,000 software product startups.
  2. Initiating a Programme to support Research and Innovation on Software Products in Institutes of Higher Learning and Research to bridge the existing gaps in the Industry-Academia research.
  3. Creating a dedicated Software Product Development Fund (SPDF)- it will have a corpus of Rs. 1000 crore in the form of Fund of Funds and participate in venture fund
  • Skilling and Human Resource Development by
  1. Using a FutureSkills Programme- for upskilling/re-skilling of 3 million IT Professionals in emerging technologies.
  2. Initiating a national “Talent Accelerator” programme- to motivate school and college students.
  3. Creating a talent pool of 10,000 committed software product leaders
  • Improving Access to Domestic Market and Cross Border Trade Promotion by
  1. Integrating the registry of Indian software products with Government e-market (GeM)
  2. Encouraging Indian Product Startups/ MSMEs through hackathons.
  • Implementation Mechanism such as
  1. Establish a “National Software Product Mission (NSPM)”- design appropriate strategy, recommend specific policy measures, recommend specific initiatives, monitor and collate various initiatives.
  2. Include various MEITy’s organizations in the implementation- such as Software Technology Parks of India (STPI), National Informatics Centre (NIC) etc.

Source: PIB


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