IT hardware PLI: Only 2-3 of 14 firms likely to meet first-year targets

Only two or three companies out of the eligible 14 firms are likely to meet their first-year targets for the production-linked incentive (PLI) scheme for IT hardware for the fiscal year ending March 31. Some companies blamed inadequate sops under the scheme while others pointed to the continuing global supply chain issues and chip shortages, for hurting their local manufacturing plans.

Dell, among the global applicants, and Micromax, through Bhagwati Products Ltd, are likely to meet the first-year targets, several people aware of the matter told ET. Another person familiar said Dixon Technologies may also just "scrape through" to meet the first-year target.

On March 3, 2021, the government notified the hardware PLI scheme with an incentive corpus of ₹7,350 crore under which 14 companies were chosen. Among the global companies were Dell, ICT (Wistron), Flextronics and Bharat FIH - formerly known as Rising Stars Hi-Tech (Foxconn) - to produce laptops, tablets, all-in-one personal computers (PCs) and servers. Under the domestic category, 10 companies, namely Lava, Dixon Technologies, Infopower Technologies (JV of Sahasra and MiTAC), Bhagwati (Micromax), Neolync, Optiemus, Netweb, Smile Electronics, VVDN and Panache Digilife were approved.

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Confirming the development, Dell said in an emailed statement to ET: "Our manufacturing and production is well on track to meet the initial commitments made by us."

Optiemus, Flextronics, Bharat FIH, Lava, Neolync, Dixon, Bhagwati, VVDN, Wistron and Flextronics didn't respond to ET's queries while Netweb, Smile Electronics, Panache Digilife and Infopower couldn't be reached for comment.

International companies need to record net incremental sales of Rs 1,000 crore to be eligible for the first-year incentive of 4% in cash backs, while for local companies, the target was Rs 50 crore.