[Home](/)/[Resources](/resources)/India PLI Scheme for Electronics IndiaPolicy # India PLI Scheme for Electronics and IT Hardware India's Production Linked Incentive (PLI) scheme for electronics manufacturing — covering mobile phones, electronic components, and IT hardware — offers cash incentives of 3-6% on incremental sales for eligible manufacturers. The scheme is a centrepiece of India's strategy to become a global electronics manufacturing hub, and for hardware companies considering India as a manufacturing base, understanding PLI eligibility, compliance requirements, and incentive structure is critical to investment decisions. Copy Link[Share on WhatsApp](https://wa.me/?text=https%3A%2F%2Fkrono-labs.com%2Fguides%2Findia-pli-electronics) At a glance IT Hardware outlay Rs 17,000 crore Incentive rate 2-4% on incremental sales Minimum DVA 25% Scheme duration 5 years Administered by MEITY ## PLI scheme overview and product categories India's PLI schemes for electronics span multiple product categories under separate notifications. Each scheme has its own eligibility criteria, incentive rate, and application window. Understanding which scheme applies to your product category is the first step — and several categories are now closed for new applications. ### PLI 1.0 — Mobile Manufacturing and Electronic Components **Details:** Launched in 2020 with a Rs 41,000 crore outlay covering large-scale mobile phone manufacturing and specified electronic components including transistors, diodes, thyristors, resistors, capacitors, and PCB assemblies. Global anchor investors (Apple EMS partners, Samsung) were primary beneficiaries of the mobile segment. ### PLI 2.0 — IT Hardware **Details:** A Rs 17,000 crore scheme targeting laptops, tablets, all-in-one PCs, and servers. Designed to incentivise domestic manufacturing of computing hardware and reduce India's dependence on imports for enterprise and consumer IT products. Applications processed through the MEITY portal. ### PLI for Semiconductors and Display Fabs **Details:** A separate Rs 76,000 crore incentive under the Semicon India Programme (not the main PLI framework) for semiconductor fabrication, ATMP (assembly, testing, marking, and packaging), and display panel manufacturing. Administered by the India Semiconductor Mission under MeitY. ### White Goods PLI and Telecom Equipment PLI **Details:** White Goods PLI (Rs 6,238 crore) covers air conditioners and LED lights with a focus on component manufacturing. Telecom Equipment PLI (Rs 12,195 crore) targets telecom and networking hardware manufacturing — relevant for equipment suppliers looking to manufacture in India for domestic and export markets. ## Eligibility criteria for IT hardware PLI IT Hardware PLI eligibility is structured around genuine domestic manufacturing — not repackaging or final assembly of imported goods. Companies must demonstrate committed investment, domestic value addition, and a credible production plan before approval. 01 Minimum domestic value addition (DVA) requirement: 25% or higher DVA for IT hardware products. DVA is calculated as the percentage of value added in India relative to the net selling price, excluding duties and taxes. The DVA threshold increases over the scheme duration. 02 Minimum investment threshold: Rs 20 crore cumulative investment for domestic companies applying under IT Hardware PLI. International companies in certain categories face a Rs 1,000 crore threshold, reflecting the scheme's intent to attract large anchor investments. 03 Manufacturing in India requirement: the product must be manufactured in India — simple assembly of fully imported CKD (completely knocked down) or SKD (semi-knocked down) kits without domestic value addition does not qualify. Genuine manufacturing with local component sourcing is required. 04 Incremental sales calculation: incentives are calculated on incremental net sales above a base year figure (typically FY2019-20 for early schemes). Year-on-year growth in domestic manufacturing is the incentive driver — companies must demonstrate real production scale-up. 05 Application via MEITY portal: applications are submitted through the Make in India portal under MEITY. Approved companies sign a PLI agreement with the government committing to investment and production milestones. 06 Approved vendor list compliance: for components, products may need to source from government-approved vendors or meet local content specifications for critical components — particularly relevant for telecom equipment PLI. ## Incentive structure and disbursement PLI incentives are production-linked — they are earned by achieving incremental sales above a base year, not by capital investment alone. The disbursement lag of 12-18 months after the claim year means companies must finance operations from other sources until incentives are received. ### IT Hardware PLI incentive rate structure **Details:** 4% incentive on incremental net sales in years 1 and 2, reducing to 3% in years 3 and 4, and 2% in year 5. Incentives are calculated annually after audited sales figures are submitted and verified by MEITY. The declining rate structure incentivises front-loaded investment and production ramp. ### Disbursement process and timeline **Details:** Incentive claims are filed after each scheme year ends, accompanied by audited financials and domestic value addition calculations. MEITY conducts verification, which typically takes 12-18 months from the end of the claim year to actual disbursement. Companies must plan working capital accordingly. ### SPECS subsidy interaction **Details:** The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) provides a 25% capital expenditure subsidy on eligible plant and machinery. SPECS and PLI can be stacked for IT hardware manufacturing investments — SPECS on capex, PLI on incremental production output. ## Strategic considerations for hardware companies PLI is not a grant — it is an incentive earned through verified production performance. Companies that invest in compliance infrastructure (DVA tracking, BIS CRS, audit readiness) from day one recover incentives faster and avoid claim disallowances that can eliminate expected returns. 01 Domestic value addition tracking and documentation: accurate DVA calculation requires traceability of every component — its origin, cost, and assembly stage. Companies must build DVA tracking systems from day one of production, as retrospective calculations are difficult to audit credibly. 02 Make in India label requirements: products benefiting from PLI may face 'Made in India' labelling requirements under the BIS Compulsory Registration Scheme and government procurement rules. Label claims must be substantiated by DVA calculations consistent with PLI filings. 03 PLI and BIS CRS mandatory certification interaction: PLI-eligible products in consumer electronics and IT hardware categories typically also require BIS CRS mandatory certification. The compliance calendar must align — BIS CRS registration must precede or accompany the start of PLI-incentivised production. 04 SEZ vs. non-SEZ manufacturing for PLI eligibility: manufacturing in a Special Economic Zone (SEZ) creates complications for PLI eligibility because SEZ sales to domestic tariff area are treated as imports. Companies should evaluate whether manufacturing in a Domestic Tariff Area (DTA) or STPI unit is preferable for PLI purposes. 05 EMS/contract manufacturer eligibility vs. OEM eligibility: PLI incentives can be claimed by either the brand owner (OEM) or the EMS/contract manufacturer depending on the scheme category. Understanding the approved applicant category is essential — under IT Hardware PLI, EMS companies manufacturing for domestic or export brands are eligible. 06 State government manufacturing incentives: state industrial policies (Maharashtra, Tamil Nadu, Karnataka, Telangana) offer additional capital subsidies, stamp duty exemptions, and power tariff concessions that stack on top of central PLI. Total effective incentive package can significantly exceed the federal PLI rate. ## Frequently asked questions ### Can a foreign hardware company apply for PLI without a local entity? No. PLI applications require an Indian legal entity — either an Indian company, a wholly-owned subsidiary of a foreign company, or a joint venture with an Indian partner. Foreign companies must incorporate an Indian entity (typically a private limited company under the Companies Act 2013) before applying. The Indian entity is the PLI agreement signatory and is responsible for all compliance and reporting obligations. ### What counts as 'domestic value addition' for PLI calculation? Domestic Value Addition is the percentage of a product's net selling price that represents value added within India. It is calculated as: (Net Selling Price minus value of imported inputs and components) divided by Net Selling Price, expressed as a percentage. Imported components are valued at their CIF (cost, insurance, freight) value. Components manufactured in India by Indian or foreign companies are counted as domestic value — origin of the manufacturer matters less than whether manufacturing occurred in India. ### How does PLI interact with BIS CRS mandatory certification? BIS CRS mandatory certification is a market access requirement independent of PLI — it is required to sell covered products in India regardless of PLI participation. For PLI-eligible products, BIS CRS registration must be in place before products can be sold in the Indian market. Since PLI incentives are calculated on net sales of products manufactured in India, and those products require BIS CRS to be sold legally, the two schemes are sequential dependencies rather than alternatives. ### Is the PLI scheme being extended beyond its current term? Individual PLI schemes have fixed terms (typically 4-6 years from the scheme's base year). The Indian government has indicated continued commitment to PLI as a manufacturing policy tool, and new scheme categories have been added since 2020. However, whether existing schemes will be extended or replaced with successor schemes depends on policy reviews. Companies should not assume automatic extension and should plan investment payback within the announced scheme term. **Disclaimer:** This page is an educational resource only. PLI scheme terms, eligibility windows, and application procedures are subject to revision by MEITY. Verify current scheme status and consult qualified advisors before making investment decisions. 🇮🇳 India roadmap for your product Every standard, document, and test that applies — free, no account required. See your free roadmap[ Want an expert to take your product through 🇮🇳 India compliance for you? One consultant from Krono's compliance team takes your product from requirements to legal sale, with a fixed quote before any work starts. See compliance services](/services) Learn this properly In-depth course that teaches the full process, not just this one answer. [Start the course — $149](/courses/04-bis-certification-for-electronics)[Prefer to read? 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