Govt Set to Review PLI Schemes for Electronics Companies Amid Concerns Over Production Target

PLIThe Centre will review its ambitious production-linked incentive (PLI) schemes on electronic manufacturing amid increasing concerns that the already lowered target of $250-$300 billion for local production by 2026 may also be tough to achieve, given the pandemic and policy-related challenges,

“We have been asked to give a detailed roadmap of how to achieve the $250-$300 billion target for electronic production by 2026,” the financial daily quoted a senior government official as saying.

The official added that among the schemes, under special focus is on the one on IT hardware. This comes with the lukewarm response to the scheme with companies committing to only half the production targets aimed for.

Even mobile phone production, which is expected to contribute the bulk 40% of the target and has seen early gains, could miss the long-term targets if issues such as GST reduction and 5G proliferation aren’t addressed, said industry executives who have met officials.

The minister of state for electronics, Rajeev Chandrasekhar, has asked officials in the ministry of electronics and Information Technology (MeitY) to figure out what needs to be done to achieve the set targets by 2026, the business daily mentioned citing officials.

MeitY has been asked to especially see if tweaks are needed to make the existing PLI scheme for IT hardware more attractive, or if a new scheme needs to be floated.

The government, while announcing the policy in February this year, had set an outlay of Rs 7,325 crore to achieve a total production of Rs 3.26 lakh crore. However, the participants that included the likes of manufacturing majors Dell, Flex, Foxconn, and Wistron have committed production worth only Rs 1.60 lakh crore, just about half of the target.

Apple, one of the major makers of tablets and laptops, has given this scheme a complete miss. The iconic smartphone major, through its contract manufacturers, is the primary driver of the PLI scheme for mobile phones, committing to 80% of the total exports projected through the scheme.

The policy around hearables & wearables, which are to contribute around $7 billion by 2026, is yet to see the light of day, industry executives noted.

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