Production Linked Incentive Scheme (PLI) for IT Hardware

The Ministry of Electronics and Information Technology (MEITY) has notified the PLI Scheme for IT Hardware on 3rd March 2021. The scheme proposes production-linked incentives to boost domestic manufacturing and attract large investments in the value chain of IT Hardware products. PLI Schemes will help in making India a globally competitive destination for electronics manufacturing and create domestic champions to further the mission of achieving an AtmaNirbhar Bharat. Click here to know more about MeitY Incentives for Electronics Manufacturers

The objective of the PLI Scheme for IT Hardware

The Production Linked Incentive Scheme (PLI) for IT Hardware proposes a financial incentive to boost domestic manufacturing and attract large investments in the value chain.

Target Segment

The Target Segment under the PLI scheme for IT Hardware will include the following:

Laptops
Tablets
All-in-One PCs
Servers

Tenure of the scheme

Support under the PLI Scheme will be provided for a period of 4 years from the financial year 2021-2022 with the base year as the financial year 2019-2020.

Eligibility Criteria

Support under the PLI Scheme will be provided to companies based on the eligibility criteria laid down, for the manufacturing of goods (covered under the target segment) in India
Eligibility shall be subject to thresholds of incremental investment and net incremental sales of manufactured goods (covered under the target segment).
An applicant must meet all the threshold conditions to be eligible for disbursement of incentive. Eligibility threshold criteria are detailed below:

PLI Scheme for IT Hardware -Threshold criteria

Quantum of Incentive

The PLI Scheme for IT Hardware shall extend an incentive of 4% to 2% / 1% on net incremental sales (over a base year) of goods manufactured in India and covered under the target segment, to eligible companies, for four (4) years. The expected annual incentive outlay and cumulative incentive outlay under the PLI Scheme for IT hardware are as follows:

Financial Year	Total Incentive (Crore)
Year 1	720
Year 2	1305
Year 3	1820
Year 4	3480
Total	7325

Incentive Per Company

The incentive per company will be applicable on net incremental sales of manufactured goods (covered under the Target Segment) over the base year subject to indicative ceilings as provided below.

PLI Scheme for IT Hardware -Incentive At the end of each year, any inappropriate incentive amount resulting from underperformance concerning the prescribed annual ceiling on net incremental sales of eligible products, by any applicant(s) in any category, will be allocated to the remaining eligible applicants under such category who have achieved net incremental sales over the annual ceiling.

Localization Plan

Manufactured Goods covered under the Target Segment, the net sales of which are considered for determining eligibility and incentive amount due under the Scheme must meet the following criteria for localization:

Sl.No	Timeline	Sub- in to be localized		Criteria	Applicable incentive
1	01 April 2021	Not Applicable			4%
2	01 April 2022 onwards	PCB Assembly		Assembled domestically by the applicant company itself	3%
3	01 April 2023 onwards	Battery Packs		Assembled domestically, either by the applicant company itself or through one of its vendors. (not applicable for All-in-One PCs and Servers)	2%
4	01 April 2024 onwards	Power Adaptors / SMPS Cabinets / Chassis / Enclosures		Assembled domestically, either by the applicant company itself or through one of its vendors.	2%
4	OR
	01 April 2024 onwards		Power Adaptors / SMPS	Assembled domestically, either by the applicant company itself or through one of its vendors.	1%

Application Procedure

An application under the PLI Scheme can be made by any company registered in India. The applicant needs to access the official webpage of the Production Linked Incentive Scheme (PLI) for IT Hardware.

The applicant needs to login into the portal using CIN as a user ID. After login into the portal, provide all details in the application.
An initial application, complete in all aspects, will have to be submitted before the due date to the Project Management Agency.
The acknowledgment will be issued by the Project Management Agency after initial scrutiny of the application. The acknowledgment shall not be construed as approval under PLI Scheme
Eligible applications will be appraised by Project Management Agency on an ongoing basis and considered for approval. Applications, as found eligible by the Project Management Agency under the Scheme will be recommended for approval of the Minister-in-Charge.
Claims for release of incentives, as examined and recommended by the Project Management Agency, will be considered for disbursement.
Incentives shall be released to eligible applicants who are meeting the required thresholds and whose disbursement claims are found to be in order.