The Production Linked Incentive (PLI) scheme aims to enhance domestic manufacturing capabilities in India, specifically targeting the electronics sector. It seeks to attract significant investments and promote self-reliance in the production of mobile phones and specific electronic components, including Assembly, Testing, Marking, and Packaging (ATMP) units.
The primary objective of the PLI scheme is to create a level playing field for domestic electronics hardware manufacturers. This initiative positions India as a global hub for Electronics System Design and Manufacturing (ESDM), fostering an environment conducive to growth and innovation.
Initially, the PLI scheme focused on mobile phone manufacturing and select electronic components. In its second phase, the scheme expanded to include the IT hardware sector, which encompasses laptops, tablets, all-in-one PCs, servers, and ultra-small form factor devices.
India is rapidly becoming a crucial player in the global electronics manufacturing arena. Over the past eight years, the sector has shown consistent growth, achieving a remarkable Compound Annual Growth Rate (CAGR) of 17%. Recently, it reached a significant milestone, with production figures surpassing Rs 9 lakh crore.
Eligible companies can benefit from incentives ranging from 4% to 6% on incremental sales (over the base year) of products manufactured in India within the designated target segments. These incentives are applicable for five years for the electronics manufacturing sector and six years for the IT hardware sector.
The PLI 2.0 scheme for the IT hardware sector provides incentives between 5% and 3% on incremental sales (over the base year of 2019-20) for goods produced within India. The incentive period spans six years, commencing from either July 1, 2023, April 1, 2024, or April 1, 2025, based on the applicants' preference.
The selection of companies eligible for the PLI scheme will rely on a detailed ranking of applicants. This includes global, hybrid (global/domestic), and domestic firms, evaluated against the eligibility criteria specified in the scheme guidelines.
The PLI scheme is anticipated to significantly boost electronics manufacturing in India, attracting investments and generating job opportunities. It aims to enhance India's self-reliance in the electronics sector, positioning the nation as a formidable player in the global ESDM landscape while supporting the growth of domestic IT hardware companies.
Q1. What is the main goal of the PLI scheme?
Answer: The PLI scheme aims to improve domestic manufacturing in India, specifically in electronics, by attracting investments and promoting self-reliance in production.
Q2. Which sectors are covered under the PLI scheme?
Answer: Initially focused on mobile phones and electronic components, the PLI scheme has expanded to include the IT hardware sector, like laptops and tablets.
Q3. What incentives are offered to companies under the PLI scheme?
Answer: Companies can receive 4% to 6% incentives on incremental sales of eligible products manufactured in India, applicable for five to six years depending on the sector.
Q4. How will companies be selected for the PLI scheme?
Answer: Companies will be selected based on a comprehensive ranking of applicants, including global and domestic firms, according to specified eligibility criteria.
Q5. What impact is expected from the PLI scheme on the electronics sector?
Answer: The scheme is expected to significantly enhance electronics manufacturing, attract investments, create jobs, and boost India's self-reliance in the sector.
Question 1: What does the PLI scheme aim to achieve in India?
A) Increase imports
B) Boost domestic manufacturing
C) Reduce employment
D) Limit technology transfers
Correct Answer: B
Question 2: Which sector was added to the PLI scheme in its second phase?
A) Automotive
B) IT hardware
C) Textiles
D) Pharmaceuticals
Correct Answer: B
Question 3: What is the incentive range for electronics manufacturing under the PLI scheme?
A) 2% to 4%
B) 4% to 6%
C) 6% to 8%
D) 1% to 3%
Correct Answer: B
Question 4: How long are the incentives provided for the IT hardware sector?
A) Two years
B) Four years
C) Six years
D) Eight years
Correct Answer: C
Question 5: What is the primary focus of the PLI scheme for electronics?
A) Attracting foreign investments
B) Creating a global electronics hub
C) Reducing reliance on imports
D) All of the above
Correct Answer: D
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