Mait seeks ₹20K cr PLI for IT hardware

Over ₹7,300 crore offered is little for global players to relocate

New Delhi, Jan. 31: IT hardware makers urge the government to allocate Rs 20,000 crore under the production-linked incentive scheme, to boost manufacturing of personal computers, tablets and servers in the country.

The proposed amount of around Rs 7,000 crore is insignificant for global players to relocate their facilities to India, said industry body Mait.

The Manufacturers' Association of Information Technology (Mait), whose members include Apple, Dell, HP and Lenovo, wants the government to address various disabilities that the sector faces, including improvement in export infrastructure to support growth under the PLI scheme.

Mait president Nitin Kunkolienker told PTI, "We are looking for higher funds for the PLI scheme. For laptops, servers, etc, the government has just proposed Rs 7,325 crore.

"I don't think that, for PCs , if you relocate and reposition supply from China or other parts of the world, it will be possible with just these kinds of funds. They are very insignificant."

He said the mobile phone industry got around Rs 41,000 crore, where there has been sustained effort for the past 10 years to push manufacturing, and even it does not come under ITA-1 (information technology agreement).

"You gave them (mobile industry) duty arbitrage earlier. There was some base created for mobile manufacturing; whereas for PC, laptop, servers and tablets, there was an inverted duty regime from 2005 to 2014 that impacted manufacturing of these products. Now, we need to re-invent," Kunkolienker said.

Under ITA-1, members of the World Trade Organization (WTO) were not allowed to impose tariff barriers on IT products, which include personal computers, set-top boxes and servers.

The enforcement of ITA1 led to many companies shutting their manufacturing unit in India, as import of finished IT products became cheaper compared to their production in the country.

Kunkolienker said there is a need to recreate and reposition India's market.

"At least Rs 20,000 crore is required (under PLI). It is based on value addition potential that exists in the country.

“There is an immense potential for Indian MSMEs (micro, small and medium enterprises) to become part of the global manufacturing ecosystem. There is a disability in MSMEs to borrow capital," Kunkolienker said.

He said currently, India has major challenges in terms of manufacturing ecosystem, including logistics.

"For real make in India to happen, there is a need to address disabilities. It won't be possible by giving 2 per cent. It does not even cover up for loss of transactions. Relocating the supply chain is not an easy target.

"To achieve this target, you need to have an export-centric approach. Shipping lines may offer competitive rates. We support the strategy of export-led growth but export infrastructure is very uncompetitive," Kunkolienker said.