Not all received proposals will be cleared due to government's limited budget for incentives
India may clear investment proposals worth ₹4,000 crore under the Centre's revised IT hardware Production Linked Incentive (PLI) scheme. All 40 proposals worth ₹5,000 crore, received by the ministry of electronics and IT under the IT Hardware PLI 2.0 scheme, are unlikely to get a green light due to government's limited budget for incentives.
"Earlier, we kept an investment target of ₹2,430 crore in the scheme. But there was an overwhelming response, forty proposals were received indicating a total investment of ₹5,000 crore. Amount needed to fund all the proposals will be ₹23,000 crore but the allocated budget is currently ₹17,000 crore," joint secretary, ministry of electronics and IT, Amitesh Kumar Sinha told ET.
"So, probably we'll not select everybody. And in case we're not selecting, investments will come slightly lower than ₹5,000 crore and investments of about ₹4,000 crore may occur," he explained.
The six-year PLI scheme for IT hardware-laptops, tablets, all-in-one personal computers, servers, and ultra small form factor device aims to attract top hardware companies. PLI Scheme 2.0 for IT hardware was approved in May this year. Its previous version was issued in 2021 with an outlay of ₹7,350 crore.
On semiconductor manufacturing unit proposals, Sinha who is also the CEO of the Indian Semiconductor Mission (ISM) said he is "very hopeful that in one or two years, many companies will come directly, and we'll see many more joint ventures too in future".
The government had received three fab proposals and two semiconductor display manufacturing unit proposals.
In the first round, the government could not approve those proposals because they did not meet the conditions but now applicants are coming up with revised proposals, he said. After Vedanta and Foxconn parted ways, they submitted proposals separately. They're trying to meet the conditions needed for approval and it will take some time, Sinha said.
Asked why the companies were unable to submit applications that were technologically advanced, Sinha said, "this sector is very difficult, and the companies are very limited whether it is fab or display technology". They must convince those companies to come to India and commercial considerations must be factored in, he said.
Companies think twice about technology transfer to competitors, he said. "But some kind of win-win situation can be created", and Indian companies can create value for global companies, and the latter will see value in supporting Indian companies, he added.