Production Linked Incentive (PLI) Scheme for IT Hardware

What is the PLI Scheme for IT Hardware?

Production Linked Incentive (PLI) Scheme for IT Hardware is an industrial incentive programme of the Ministry of Electronics and Information Technology (MeitY). The scheme pays approved manufacturers a percentage-based incentive on the incremental sales of IT hardware manufactured in India, so that global and domestic brands set up or expand plants in the country instead of importing finished devices.

The current version, PLI Scheme 2.0 for IT Hardware, was approved by the Union Cabinet in May 2023 with a budgetary outlay of Rs 17,000 crore. It replaced PLI 1.0 for IT hardware, widening both the product list and the incentive tenure.

PLI 2.0 for IT Hardware is not a citizen benefit scheme. There is no scholarship, subsidy or payment for individuals under it. Applicants are companies and limited liability partnerships that commit to a manufacturing investment and production plan.

Key objectives

• Build large-scale domestic manufacturing capacity in laptops, tablets, all-in-one PCs, servers and ultra small form factor devices.
• Reduce India's import dependence for IT hardware.
• Deepen the local component and sub-assembly ecosystem through an additional incentive for India-made inputs.
• Create direct manufacturing employment: MeitY projected around 75,000 additional direct jobs from the scheme.

Main features

• Rs 17,000 crore budgetary outlay.
• Six-year incentive tenure per approved applicant.
• Incentive paid on incremental net sales of covered goods over a base year.
• Optional additional incentive of up to 3 per cent for using components, sub-assemblies and inputs designed and manufactured in India.
• Three applicant categories; global companies, hybrid (global/domestic) companies and domestic companies.
• MeitY has approved 27 manufacturers under the scheme.

Who is eligible for the PLI Scheme for IT Hardware?

A company can apply if:

• It is registered in India as a company under the Companies Act or as an LLP, and files its own audited accounts.
• It manufactures, or commits to manufacture in India, one or more of the covered goods; laptops, tablets, all-in-one PCs, servers, ultra small form factor devices.
• It meets the cumulative investment and incremental net sales thresholds notified by MeitY for its applicant category (global, hybrid or domestic).
• It manufactures in India either directly or, in the case of a brand owner, through a contract manufacturer covered by the application.
• It applies within a notified application window and pays the prescribed non-refundable application fee.

You cannot apply if:

• You are an individual, student, job seeker or sole proprietor, the scheme has no personal benefit component and no individual application route exists.
• You are a trader, importer or reseller who does not manufacture the covered goods in India.
• Your company only assembles products outside the covered product list, such as mobile phones, which fall under a separate PLI scheme.
• Your company cannot meet the notified investment or sales thresholds within the committed timeline.
• The application window is closed: MeitY does not accept late or offline applications.

Approved applicants that miss committed investment or incremental sales targets in a given year are not eligible for the incentive for that year. MeitY additionally introduced a penalty provision in PLI 2.0 for shortfalls against committed manufacturing targets.

What documents are required for the PLI IT Hardware application?

How to apply for the PLI Scheme for IT Hardware

1. Confirm that your entity is a company or LLP registered in India that manufactures, or will manufacture, laptops, tablets, all-in-one PCs, servers or ultra small form factor devices. Individuals cannot apply.
2. Read the scheme guidelines and gazette notification published by MeitY, and identify your applicant category, global, hybrid or domestic — and the investment and incremental sales thresholds that apply to it.
3. Wait for MeitY to notify an application window. The PLI 2.0 window opened on 1 June 2023 for 45 days and was later extended; applications outside a notified window are not accepted.
4. Register your company on the MeitY PLI application portal and create the applicant profile.
5. Prepare and upload the detailed project report setting out the manufacturing location, target products, year-wise investment and projected incremental net sales for each of the six years.
6. Upload the statutory documents; incorporation certificate, audited accounts, GST registration, PAN, TAN and the board resolution authorising the application.
7. Pay the non-refundable application fee as notified and attach the payment proof.
8. Submit the application before the window closes. MeitY evaluates it and, if approved, issues an approval letter confirming the applicant category and the six-year tenure start date.
9. After approval, file annual incentive claims with a chartered accountant certificate proving incremental net sales and eligible investment for that year.

How much incentive does the PLI Scheme for IT Hardware provide?

The scheme's total outlay is Rs 17,000 crore across all approved applicants and all six years. There is no per-company "maximum benefit" figure that applies generally: each approved applicant has its own ceiling linked to the category it applied under and the targets it committed to.

The incentive is calculated on incremental net sales of covered goods manufactured in India over the base year, at the rate notified in the scheme guidelines for that applicant category and year. On top of this, an applicant using components, sub-assemblies and inputs designed and manufactured in India can claim an additional incentive of up to 3 per cent.

Incentives are payable for six years, starting from 1 July 2023, 1 April 2024 or 1 April 2025 depending on the start date chosen at application.

What has the PLI Scheme for IT Hardware achieved?

According to MeitY announcements, 27 IT hardware manufacturers were approved under PLI 2.0, of which 23 were ready to begin production immediately and four within 90 days. Participants include global brands manufacturing directly as well as brands operating through Indian electronics manufacturing services partners, alongside a group of domestic manufacturers.

MeitY projected that the scheme would lead to total production of about Rs 3.35 lakh crore, additional investment of Rs 2,430 crore in electronics manufacturing, and around 75,000 additional direct jobs.

How does a company track its PLI claim?

1. Log in to the MeitY PLI portal with the applicant company credentials.
2. Open the claims section for the relevant incentive year.
3. Upload the chartered accountant certificate and supporting sales and investment data.
4. Track the claim status as it moves through MeitY scrutiny, project management agency verification and disbursement.

Disbursement follows verification of the incremental sales and investment figures. A claim that does not meet the year's committed thresholds is rejected for that year.

Common reasons PLI IT Hardware applications fail

• Applicant is not a company or LLP: individuals and proprietorships are outside the scheme.
• Products fall outside the covered list, for example mobile phones, which are covered by a separate PLI scheme.
• Application filed outside a notified window.
• Investment or incremental sales thresholds not credible in the project report.
• Base year net sales not supported by audited accounts.
• Application fee not paid or proof not attached.
• Targets missed in a claim year, which forfeits that year's incentive.

Help and contact for the PLI IT Hardware scheme

• Ministry of Electronics and Information Technology, Electronics Niketan, 6 CGO Complex, Lodhi Road, New Delhi 110003
• Officer directory: meity.gov.in/connect. The scheme has no toll-free public helpline, and queries are routed to the Electronics Manufacturing division
• Scheme page: meity.gov.in, under Schemes and Services
• Scheme guidelines, the gazette notification and FAQs are published on the MeitY website and should be treated as the authoritative text

The PLI Scheme for IT Hardware offers no benefit to individual citizens. Any person or agency offering to "register you" for a PLI benefit, or charging a fee for personal enrolment, is running a scam. The only route is a company application filed directly with MeitY.