Government to Revise Production-Linked Incentive Scheme for IT Hardware: Three Electronics Manufacturing Services Stocks Under Scrutiny

India Recalibrates Electronics Incentive Scheme Amid Rising GPU and Memory Costs

The Indian government is revising its flagship Production-Linked Incentive (PLI) 2.0 scheme for IT hardware due to a significant increase in costs of Graphics Processing Units (GPUs) and memory. This upward trend has made it challenging for manufacturers to participate in the original scheme, prompting the government to reassess its incentives.

PLI 2.0, launched in 2021, aimed to boost domestic production and exports of IT hardware, including laptops, tablets, and servers. However, the surge in GPU and memory costs, largely driven by global supply chain disruptions and semiconductor shortages, has made it difficult for companies to meet the scheme's requirements.

The recalibration of PLI 2.0 is expected to provide more flexibility to manufacturers, allowing them to adjust their production strategies and costs. The revised scheme will likely take into account the current market dynamics, enabling companies to invest in the production of IT hardware while maintaining profitability.

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Key Figures:

• Production-Linked Incentive (PLI) 2.0: India's flagship electronics incentive scheme for IT hardware
• Graphics Processing Units (GPUs): Critical components driving the surge in costs
• 2021: Year of the launch of PLI 2.0
• Global supply chain disruptions: Contributing factor to the rise in GPU and memory costs