With a budget of Rs 17,000 crore, the Union government recently unveiled its Production-Linked Incentive (PLI) Scheme 2.0 for the IT hardware sector. The scheme's revised rules come with high hopes that they will incentivize and spur growth across the sector, as they have for mobile phone manufacturing.

India is the world's second largest handset manufacturer, with exports of Rs 90,000 crore this year. Following consultations with stakeholders, including major global manufacturers, the PLI 2.0 decision was made. The scheme's first edition in 2021 did not excite the industry. According to data, the sector received approximately Rs 123 crore in investment during the first half of last year, compared to an expected Rs 2,500 crore.

The prospects for India benefiting from the current global environment remain favourable as governments and businesses around the world develop China-Plus-One supply chain strategies, which were sparked by the US-China trade war initiated by former US President Donald Trump and exacerbated by China's prolonged 'Zero-Covid' lockdowns during the pandemic.

India was quick to recognise the opportunity for domestic manufacturing growth presented by global concerns about supply chain disruptions and the need to develop alternative robust global value chains. According to one estimate, India is third in the world in terms of computer hardware exports, after the United States and China.