Making India a global hub for IT hardware manufacturing

By Lakshya Sharma and Shivangi Sinha

In a bid to provide a boost to IT hardware manufacturing in India, the Union Cabinet approved the Production Linked Incentive (PLI) Scheme for IT Hardware on 24 February this year. The underlying vision is clear: To make India a global hub for manufacturing and attract large investments in the value chain. The scheme offers an incentive of 4% to 2% / 1% on large-scale production of laptops, tablets, all-in-one PCs and servers for a period of four years. Today, India’s demand for these products is largely met through imports. Given this and growing strategic security concerns, it has become necessary to develop a trusted and reliable value chain for the market.

Making India global hub for manufacturing

India is a large and growing market for IT hardware products. India is expected to consume over $120 bn of IT hardware over the next decade. We have a great opportunity to leverage this impending demand and build economies of scale along with global competitiveness. To enable this, a cascading structure of incentives has been created to effectively incentivise every level of the value chain. The PLI will attract global majors to shift significant manufacturing capacities to India and encourage MSMEs to leverage opportunities offered by a vibrant and robust ecosystem. The scheme also includes a push to develop competence and 'Atmanirbharta' (self-reliance) in critical subassemblies like PCBA, Battery Packs, Power Adapters, Chassis etc. This will nurture the ecosystem and enhance cost competitiveness. Besides the PLI, incentives are also being provided on capex for the manufacturing of components and sub-assemblies and for creation of electronics manufacturing clusters. These schemes will create positive spill over effects for multiple allied sectors in addition to ensuring employment generation.

New digital realities

Launched in 2015, the Digital India campaign aims to deliver better services and create infrastructure for transparent and inclusive governance. Critical to this is our mission of bridging the digital divide across India. The COVID-19 pandemic has only further awakened us to this reality. According to the 59th Review Report of the National Digital Literacy Mission (NDLM), around 16 crore rural households in India do not have access to computers. This is something PLI for IT Hardware will aim to address by creating a vibrant industrial ecosystem to cater to the ever-growing domestic demand.

In addition, the push for data localization and data governance demands that India develops a secure and reliable hardware supply chain. The PLI scheme is a step in this direction.

All in all, the scheme aims to realise the vision of transforming India into a digitally empowered society, with indigenously built digital infrastructure.

Make in India opportunities Odisha

Produces more than 50% of aluminium in India

Odisha is the mineral hub of India and the largest aluminium, steel and stainless steel producer in the country. Highest mineral production of INR 49,505.66 crore with 13.88% of India’s total value.

Odisha, with a coastline of 480 km, is located on the east coast of India along the Bay of Bengal. The state is served by 3 ports- Paradip, Dhamra and Gopalpur. Paradip port is one of the largest ports on the eastern coast of India and has a capacity of 127 MMT.

Photo Courtesy: The Economics Times

It is the largest port in India in terms of average output per shipberth-day. During 2018-19, 109.27 million tons of cargo was handled.

The state is domestically well connected with over 250,000 km of road length and 15 national highways passing through the state. The state has installed power capacity of over 8,861 MW and is the first state in India to have undertaken restructuring initiatives in the power sector. Bhubaneswar, the state’s capital, was ranked first in the ‘Smart City Challenge’ of the Government of India.

A first-of-its-kind Single Window Portal called Government of Odisha – Single Window for Investor Facilitation and Tracking (GO SWIFT) has been introduced covering the complete life-cycle of industrial projects for timebound and hassle-free investment in the State.

Puducherry

Tourist arrival of over 1.8 mn in 2018

Agriculture and tourism sectors are major contributors to the economy of Puducherry and about 35% of the UT's population depends on agriculture and allied activities.

The degree of irrigation is as high as 90% of the total land. Major food crops grown in the territory include rice, ragi, bajra and pulses, while various cash crops grown include sugarcane, cotton and groundnuts.

Puducherry has mineral deposits of limestone, clay, lignite, phosphate rocks, canker and laterite, among others. Some of the key industries in Puducherry include chemicals, textiles, leather, electronics, light engineering, metals, tourism and food processing.

Puducherry is situated on the Coromandel Coast of the Bay of Bengal. Being a former French colony, the territory witnesses a prominent presence of French culture. The territory is conveniently located about 135 km away from Chennai, with a minor port located between two major ports at Chennai and Tuticorin. Gingee and Pennaiyar are the major rivers in the region. Ministry of Shipping has identified a lighthouse in the territory to be developed in phase-I of its Lighthouse Tourism initiative.

Punjab

Largest agricultural area under irrigation in India

Punjab has an excellent network of irrigation facilities with 99.9% of net area sown covered under irrigation.

Punjab, called the "Granary of India", is bounded on the west by Pakistan, on the north by Jammu and Kashmir, on the northeast by Himachal Pradesh and on the south by Haryana and Rajasthan. The state has one of the highest road densities amongst Indian states at 133 km per 100 sq. km. It is well connected to all major markets with 72,212 km of the total road network, 2,830 km of rail track network and 5 airports. It has a total installed capacity of over 13,400 MW. Punjab ranks second in logistics ease in the country. It also offers a strong logistics backbone with five container freight stations (CFSs) and four inland container depots (ICDs); thereby easing exports and imports for the state.

The state has a total cultivable area of 4.2 mn ha, which constitutes 3% of the net area sown in India. With this area, Punjab produces 18% of wheat, 12% of rice, 10% of milk, 20% of honey, 48% of mushroom and 5% of cotton in the country. In terms of wheat production, it generates the third largest marketable surplus after Canada and Australia; while in case of rice, its market surplus is second only to Thailand.

Major industries in Punjab include food processing, tractors and auto components, agro-based parts, bicycle and bicycle parts, sports goods, light engineering goods, metal and alloys, chemical products and textiles. The state has also emerged as a key hub for textile-based industries, including yarn, readymade garments and hosiery. The clusters around food and dairy products are the other major sectors of the state.

Rajasthan

Highest solar energy potential in India - 142 GW

Agriculture sector contributed close to 25% to Rajasthan's GDP in 2017-18. It is the largest producer of coarse cereals and coriander, and the second largest producer of pulses, oilseeds, cumin and garlic in India.

The state provides opportunities in the areas of organic and contract farming as well as in infrastructure developments related to agriculture. The state is home to over 850 factories in the food processing sector.

Rajasthan is the second-largest mineral producing state and the sole producer of lead and zinc in India. The state has one of the highest limestone reserves, making it a hub for cement industries. The state attracted about 59 mn tourists including foreign tourists during 2019. The state is home to India's first successful Japanese Industrial Zone located at Neemrana, spread across 473 ha.

Rajasthan is the largest state in India (area wise). It shares its border with five major Indian states — Punjab, Haryana, Uttar Pradesh, Madhya Pradesh and Gujarat. An area of 13,447 sq km of the state falls in the National Capital Region (NCR), which is around 24.5% of the total NCR. The state has the solar potential of 142 GW, highest among Indian states, and wind potential of 18.7 GW. The total installed power capacity is nearly 23,000 MW.

Rajasthan ranks #1 in Export Preparedness Index 2020 under Landlocked states category. Moreover, it has a vast network of national highways and railways, which provides excellent connectivity to major cities and ports of Gujarat and Maharashtra. The state's total road length is approximately 236,572 km, while the railway length stands at 5,929 km. The state has an international airport and an air-cargo complex in Jaipur, the state’s capital, and eight inland container depots.

Source: Invest India, Government of India