Indian Govt Targets To Raise Local Sourcing of IT Parts To $20 Billion

[NG Missile Vessels]

The government is going to “severely restrict" imports of parts worth billions of dollars from China for IT hardware as part of ‘trust sources’ norms, according to a Times of India report quoting sources. It added that the Centre eyes a significant surge in local sourcing of components for laptops and servers at around $20 billion in the next 4 years against $1 billion now.

“We will restrict the movement of parts and components from China, as the focus is on trusted sourcing and trusted locations. Also, we need to find out ways to encourage companies to ‘Make in India’, rather than continue with just imports," TOI quoted one of the sources as saying.

It also quoted the source as saying, “The government is certainly not happy with the heavy dependence on China, and does not find the current ecosystem of component sourcing healthy."

The implementation of the Rs 17,000 crore production-linked incentive (PLI) scheme for IT hardware and the start of an “import management system" from November 1 reflects the government’s resolve to establish a robust ecosystem for device and server manufacturing within India, like the successful model for smartphone manufacturing, the report quoted sources as saying.

The over-dependence on a single country, particularly China, for critical components poses risks to supply chains and national security.

Currently, India sourced about 10 per cent of the IT hardware supply chain, accounting for around $1 billion within the total industry size estimated to be $8-10 billion.

Last month, in order to promote domestic manufacturing, the government on also imposed import restrictions on laptops, tablets, all-in-one personal computers, ultra-small form factor computers, and servers with immediate effect.

In its notification, the Directorate General of Foreign Trade (DGFT) had said exemption from import licensing is provided up to 20 items per consignment for R&D, testing, benchmarking and evaluation, repair and return and product development purposes.

“Import of laptops, tablets, all-in-one personal computers, and ultra-small form factor computers, servers…is ‘Restricted’ with immediate effect," it said. The DGFT is an arm of the commerce and industry ministry which deals with exports and imports in the country.

Make In India Push: Govt Targets To Raise Local Sourcing of IT Parts To $20 Billion - News18

The government is not happy with the heavy dependence on China, and does not find the current ecosystem of component sourcing healthy, says an official

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[SoulSpokesman]

Easier said than done. Besides, the final inputs even to intermediate parts may often come from PRC.

Regards

 

[NG Missile Vessels]

Over 30 companies may qualify for IT hardware PLI scheme: Report

Over 30 companies are expected to qualify for ₹17,000 crore production linked incentive (PLI) scheme for IT hardware manufacturing, said a report by news agency PTI citing a government official.

“Around 30-32 company may qualify for the (IT hardware PLI scheme. Some are looking ineligible for the scheme due to financial issues and organisation structure issues," said the official as quoted by PTI.

Around 40 IT hardware companies, including Dell, HP, and Lenovo, had applied for the PLI scheme to manufacture personal computers, laptops, tablets, servers and other equipment worth ₹4.65 lakh crore.

The selected companies will get incentives well within the fund allocated for the scheme, the official told PTI.

IT hardware companies such as Dell and HP are participating directly in the programme, while other players such as HPE, Lenovo, Acer, ASUS, and Thomson are taking part through Electronic Manufacturing Service (EMS) companies with manufacturing facilities in India, such as Flextronics and Rising Star.

Foxconn, the Apple's supplier had also applied for the PLI scheme through its subsidiary.

Among the domestic companies, Padget (Dixon), VVDN, Netweb, Syrma, Optiemus, Sahasra, Neolync, Panache, Sojo (Lava), and Kaynes Technologies had applied for the PLI scheme.

“The list of eligible companies is likely to be released by September end or in early October," said the report citing the official.

In the first year of the PLI scheme almost every company will be allowed to continue their imports as usual and reduction in the import quota will start after September 2024, the official told the PTI.

All the companies have been asked to submit their import data of the last three years and the destination from where they import the devices.

Through the IT hardware PLI scheme 75,000 jobs are expected to be generated in electronic manufacturing and an incremental investment of ₹5,000 crore is also anticipated.

Over 30 companies may qualify for IT hardware PLI scheme: Report

The selected companies will get incentives well within the fund allocated for the scheme, the report said

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Around 30 Out Of 40 Applicants May Qualify for Rs 17,000 Crore PLI For IT Hardware

Apple's supplier Foxconn has also submitted an application for incentives through one of its subsidiaries.

www.google.com

 

[NG Missile Vessels]

Easier said than done. Besides, the final inputs even to intermediate parts may often come from PRC.

Regards

Top Taiwanese laptop-maker Asus is moving its key supplier from China to India

The company will collaborate with contract manufacturer Flex to establish a new factory in Chennai, taking advantage of the government's production-linked incentive scheme for IT hardware. With a market valuation of $15 billion, Asus aims to expand its production operations in India and become...

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