The government is working closely with startups, industry and academia to create a rapidly expanding server and IT hardware manufacturing ecosystem in India, Union Minister Rajeev Chandrasekhar said in a Digital India Dialogues meet in Bengaluru.
"Our ambitions are clear — a $300-billion electronics industry and a $1-trillion digital economy by 2026. The government will act as an enabler in catalysing India’s IT hardware ecosystem that includes data centres, servers etc," he said.
"This PLI scheme for IT hardware has been carefully designed this time with inputs from the industry. India represents one of the fastest-growing consumer markets in the electronic manufacturing ecosystem as we have digitised our economy, government and public services at an unprecedented rate," he said.
The discussions were focused on stimulating ecosystem development while encouraging enterprises and startups to expand their presence in the country.
"While we welcome big foreign companies to set up their base in India, we are also enabling the industry to benefit from incentives and expand the EMS ecosystem in India," the minister said.
In May, the government approved the PLI 2.0 scheme for IT hardware with an outlay of Rs 17,000 crore, doubling the budget from the 2021 scheme. The scheme aims to encourage domestic manufacturing, attract investments, and promote the localisation of IT hardware components and sub-assemblies.
It covers laptops, tablets, all-in-one PCs, servers, and ultra-small form factor devices. In doing so, the government aims to catalyse the domestic IT hardware manufacturing ecosystem of India, thereby creating Indian champions in the IT hardware industry.
Asked whether there is any effort by the government to become a part of the electronics supply chain (advanced avionics) of aeroplane, the minister said that he expects companies like Honeywell and Garmin to start developing such advanced electronics in the country.
"I am hopeful that companies like Honeywell and Garmin will do avionics in India. They all have their back office capability centers here and they should also step up and start doing R&D here. The next generation of avionics should come from India... And we have the capability. I think a lot of this kind of innovation will come from startups," he said.
The PLI 2.0 scheme is set to run for six years and is projected to generate a significant increase in production worth Rs 3.35 lakh crore, with an expected investment of Rs 2,430 crore. It is also likely to create approximately 75,000 new direct job opportunities.
Since 2014, the electronics manufacturing industry in India has achieved a consistent compound annual growth rate (CAGR) of 17 percent. Starting from around $16 billion the production has now surpassed the significant benchmark of $105 billion.