Dell, HP, Foxconn, Lenovo Among 27 Beneficiaries Under India’s PLI 2.0 Scheme for IT Hardware

Posted by Written by Melissa Cyrill Reading Time: 4 minutes

India has announced that 27 companies, including Dell, HP, Foxconn, and Lenovo, are selected as beneficiaries for PLI 2.0 Scheme incentives. Of these, 23 companies are ready to start local production.

PLI 2.0 Scheme applicants approved

Expanding on the success achieved with the Production Linked Incentive scheme (PLI) for mobile phones, the government of India sanctioned the next round called ‘PLI Scheme – 2.0 for IT Hardware‘ on May 17, 2023, with August 30 as the application deadline. The PLI 2.0 Scheme for IT Hardware encompasses the production of laptops, tablets, all-in-one PCs, servers, and ultra small form factor devices. Following a lukewarm response to the earlier iteration of the scheme, the government has nearly doubled the total budget outlay, increasing it to INR 170 billion (US$2.03 billion).

On November 18, the Minister of Communications & IT Ashwini Vaishnaw said that approvals had been granted to 27 IT hardware manufacturers, including leading brands, such as Acer, Asus, Dell, HP, Lenovo, to commence manufacturing operations in India. Among them, Lenovo, Thompson, Acer, and Asus will manufacture laptops while HP, VVDN, and Lenovo will manufacture servers, to name a few.

Per Vaishnaw, 23 out of the 27 approved applicants are “ready to start manufacturing on day zero.” Chinese IT product companies can also participate in manufacturing in India by collaborating with local entities for production and assembly.

The anticipated outcomes of the PLI Scheme 2.0 are:

  • Employment generation: Approximately 200,000 jobs, comprising 50,000 direct employment opportunities and 150,000 indirect employment opportunities.
  • Value of IT hardware production: Expected to reach INR 3.5 trillion (US$42 billion).
  • Investment by companies: About INR 30 billion investments (U$360 million) in the sector.

If an applicant falls short in achieving incremental investment target on cumulative basis by a certain percentage, its payable PLI amount will be reduced by one half of that percentage, provided shortfall is not more than 40 percent. – Minister of Communications & IT Ashwini Vaishnaw

India’s annual demand for IT products, dominated by laptops, all-in-one PCs, tablets, and servers, is estimated to range between US$8-10 billion. These are mostly imported from China. As part of its supply chain diversification policy, Apple has been pushing its manufacturing partners to expand their footprint outside China. India is among the beneficiaries of this move. Based on the commitments made by the US tech giant, Apple is expected to reach a collective production value worth US$40 billion in five years, ending FY 2026-27.

India aims to expand this manufacturing footprint and production value via its PLI schemes—bringing together reluctant global brands and emerging domestic partners—to deepen an industrial supply chain ecosystem. Apple’s manufacturing strategy involves collaboration with global electronic contract manufacturers instead of establishing its own production facilities, which is why it did not apply for incentives under the PLI Scheme for IT Hardware.

Local contract manufacturing to get boost

Dixon Technologies currently manufactures laptops, mobile phones, consumer durables, and lighting for companies like Asus, Samsung, Phillips, Xiaomi, and Godrej.

US-based Flextronics is another PLI 2.0 Scheme beneficiary and assembles laptops, mini desktops, among others, for Hewlett-Packard (HP), and soon will add Google Chromebook to its client base. There is speculation that Japanese laptop brands like Toshiba could seek an Indian manufacturing partner.

READ: Companies Start Production in India Under IT Hardware PLI Scheme

List of 27 companies selected under PLI 2.0 for IT Hardware

  1. Dell International Services India Pvt.
  2. Rising Stars Hi-Tech Pvt.
  3. HP India Sales Pvt.
  4. Flextronics Technologies (India) Pvt.
  5. Padget Electronics Pvt.
  6. SOJO Manufacturing Services (AP) Pvt.
  7. VVDN Technologies Pvt.
  8. Goodworth Electronics Pvt.
  9. Neolync Tele Communications Pvt.
  10. Syrma SGS Technology Ltd.
  11. Bhagwati Products Ltd.
  12. Netweb Technologies India Ltd.
  13. Genus Electrotech Ltd.
  14. Sahasra Electronic Solutions Ltd.
  15. Hangsine Technosoft Pvt.
  16. Riot Labz Pvt.
  17. Smile Electronics Ltd.
  18. Mega Networks Pvt.
  19. Plumage Solutions Private Limited
  20. HLBS Tech Pvt.
  21. Panache Digilife Ltd.
  22. RDP Workstations Pvt.
  23. Kaynes Electronics Manufacturing Pvt.
  24. INP Technologies Pvt.
  25. Optiemus Telecommunication Pvt.
  26. ITI Ltd.
  27. Sancraft Industries Pvt.

Source: BQ Prime

Spotlight: Dixon Technologies

We had applied under the hybrid domestic category and have committed cumulative production value of Rs 48,000 crore [INR 480 billion/ approx. US$5.75 billion] over six years, starting [FY2024-25], and an investment of Rs 250 crore [INR 2.5 billion/US$29.9 million]. In the first year, our focus will be on final assembly and PCBA (printed circuit board assembly) and later we will get into components like batteries, chargers, display cabinets, etc. – Sunil Vachani, Managing Director of Dixon Technologies, Business Standard

Dixon Technologies, a prominent player in electronics manufacturing services (EMS), holds the distinction of being the India’s largest domestic entity in this sector. Notably, the company has been selected as a beneficiary under the PLI 2.0 Scheme for IT Hardware.
By applying through Padget Electronics, Dixon Technologies is poised to potentially contribute one-seventh of the additional production value totaling INR 3.5 trillion committed collectively by the 27 eligible companies throughout the scheme’s six-year duration. This underscores Dixon Technologies’ pivotal role in the rapidly growing domestic electronics manufacturing landscape.

Dixon bags Lenovo contract

In an exchange filing, widely reported December 12, 2023, Padget Electronics, a wholly-owned subsidiary of contract manufacturer company Dixon Technologies, informed that it would be manufacturing laptops and notebooks for the Chinese tech giant Lenovo in the country under the PLI Scheme 2.0. Rising Stars Mobile India, a subsidiary of Foxconn, had previously been in discussions with Lenovo. In the second quarter of the year, Lenovo held 16.2 percent of the Indian PC market. Dixon will benefit from Lenovo’s global know-how and IT hardware manufacturing processes, per the company’s vice chairman and managing.
The article was originally published November 20, 2023. It was last updated December 12, 2023.