Samsung, Acer Bid For UP Govts Tablet And Smartphone Scheme

NEW DELHI: The ministry of IT and electronics (MeitY) has sought an additional corpus of $3 billion (about Rs 22,500 crore) to expand the incentives under production-linked (PLI) schemes for IT hardware and wearables & hearables segment in a bid to capture at least 15% of the $350 billion global market by 2026.

“Out of this, about $2 billion is for IT hardware and the balance $1 billion is for wearables and hearables,” a senior government official told ET.

The official added that the entire calculation was based on the target the country wished to achieve. “We wish to capture at least 15% of the global IT hardware market, out of which electronic hardware would be about $250 billion and wearables and hearables about $100 billion in the next five years... for that, we need additional funds to incentivise companies to come here and set up shop.”

This comes within months of the industry flagging the inadequacy of the current incentive structure to the government. The government, while announcing the policy in February this year, had set an outlay of Rs 7,325 crore to achieve a total production of Rs 3.26 lakh crore.

However, the participants that included the likes of manufacturing majors Dell, Flex, Foxconn and Wistron committed production worth only Rs 1.60 lakh crore, just about half of the target. Industry associations have sought doubling of the incentive rate, which is at present 2.3%, and expanding the corpus to Rs 20,000 crore. Apple, one of the major makers of tablets and laptops, had given this scheme a complete miss.

Officials added that MeitY has sent the proposal to expand the incentives to the empowered group of secretaries.

The empowered group of secretaries, which will take a decision on the matter, comprises the cabinet secretary, the Niti Aayog CEO and secretaries from DPIIT, commerce, revenue, department of economic affairs and MeitY. The group of secretaries has the power to alter the scheme and the rate of incentive. Once ratified, the proposal will then be sent to the cabinet.

Speaking to ET, minister of state for IT, Rajeev Chandrasekhar, said, “We have a series of meetings planned to assess progress of various PLIs, to see which ones have more potential and need more inputs”.

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Semiconductor PLI: Industry seeks greater clarity on incentives and support

Chipmakers said that the nearly $10 billion package will start showing results only in about three-five years and around 30% of the 300,000 engineers graduating every year could get absorbed in this industry.

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