India's Rising Stature in Global Laptop Manufacturing

India's ambitious Rs 17,000 crore production-linked incentive (PLI) scheme for IT hardware is starting to pay off, attracting global laptop brands to shift their manufacturing bases from China to India. This strategic move is fueled by the escalating trade tensions between China and the US, and the anticipation of sector-specific tariffs by the Trump administration.

Current Manufacturing Capacity: Industry sources reveal that India's present manufacturing capacity could replace about 10-20% of the total laptop imports, which amounted to $11 billion in FY2024. Domestic production, currently at $1 billion, is poised for significant growth.

PLI 2.0: A Game-Changer for India's IT Hardware Sector

Introduced on May 29, 2023, the PLI 2.0 for IT Hardware, with a budget allocation of Rs 17,000 crore over six years, aims to bolster local manufacturing. The scheme offers a 5% incentive on net incremental sales, encouraging manufacturers to increase component localisation annually.

The government's expectations are high, with projections of Rs 3,000 crore in investments, Rs 3.5 lakh crore in production value, and the creation of 47,000 jobs nationwide.

Global Brands Partner with Indian Manufacturers

Asus, MSI, and other global brands are forging partnerships with Indian manufacturers like VVDN Technologies and Syrma SGS, leveraging the PLI scheme's benefits. These collaborations are not just about avoiding tariffs but also about tapping into India's growing market and export potential.

Dixon Technologies' Leap: Allocating over Rs 1,000 crore for a new manufacturing unit in Tamil Nadu, Dixon Technologies is set to produce laptops for HP Inc, Lenovo, and Asus, marking a significant milestone in India's manufacturing capabilities.

Challenges and Opportunities Ahead

Despite the progress, challenges such as the lack of appropriate testing facilities for US exports and the need for backward integration of components remain. However, companies like Asus are optimistic, considering encouraging their global component suppliers to establish operations in India.

India's journey to becoming a global laptop manufacturing hub is just beginning, with the PLI scheme acting as a catalyst for change and innovation in the sector.