Global firms will respond within weeks: Vaishnaw

The government on Wednesday announced a new IT Hardware production-linked incentive scheme by raising the outlay by over two-fold from the one announced in 2021, to Rs 17,000 crore. Telecom & IT minister, Ashwini Vaishnaw spoke to Rishi Raj after unveiling the scheme. Excerpts:

You recently returned from your US trip and announced the new IT Hardware PLI scheme. Did you get any firm assurance for investments under it?
During my US trip, I met a lot of companies and found that they were all very excited to do business in India. Companies like HP, ASUS, Acer showed their interest in coming to India. The general bullishness of the industry gave me feeling that once we announce the new scheme, lot of global companies will come forward and make investments under it. The scheme was finalised after extensive consultations with the industry and their feedback was incorporated.

What’s the main aim of the scheme?
It is to push local manufacturing of IT hardware such as laptops, tablets, desktops and servers. We are looking at incremental production of Rs 3.35 trillion, and incremental investment of Rs 2,430 crore. The scheme will provide incremental direct employment to 75,000 people.

How soon do you expect the industry to respond to this scheme in terms of announcing their participation?
I held a meeting with industry representatives today. Around 40-45 people attended it. I asked them, how’s the josh and they responded, “very high”. I had expected it would take a few months for them to respond to this scheme but they surprised me by saying that things would start rolling in few weeks.

The IT Hardware PLI scheme was announced in 2021 and some companies did participate. Why a new, revised scheme now? What happens to the earlier ones?
After looking at the success of smartphone and telecom products PLI, we thought if we modify the IT Hardware scheme, more investments would follow. Just to give an example, in telecom products PLI, we had estimated investments worth `900 crore in the first year, but we got investments of around Rs 1,600 crore. For the second year, we had estimated investments of around Rs 600 crore, but we actually got Rs 1,800 crore. The companies which had participated earlier will have the option to migrate to the new one.

How have incentives and some other aspects improved under the new scheme?
We have increased the duration of the scheme to six years from the earlier four years. Companies can claim incentives in any of the six years. The incentive has been raised to 5% from 2%. Investment norms have been flexible, which allow companies to even include investments made by their suppliers or contract manufacturers. So, companies can claim additional incentives of 3-4% if they use locally manufactured components. Further, there will be flexibility for the scheme beneficiaries in choosing the base year as well.