The government has begun to examine ways that multinational manufacturers of IT hardware and electronics can boost the local content of goods built in India to 60-80% during the next five to 10 years. According to one of the people, the government has made it a top priority for businesses operating in India to use modern production methods like surface-mount technology (SMT) lines in order to increase the proportion of local value added.

 

“So, for example, in the IT hardware production-linked incentive (PLI) scheme, the government wants the industry to go beyond the assembly of components. Their ask is to make the printed circuit boards (PCBs) locally. If we make the motherboard here, that will give a big boost to local value addition,” an industry executive who attended a meeting with officials of the Ministry of Electronics and Information Technology.

 

Other business leaders claimed that India's ecosystem for the production of electronics gear is still in its infancy and may take more than 24 months to fully mature.

 

“Most laptop makers right now get the components in strips which need to be soldered on the circuit board. It is an automated process which needs SMT lines to be set up in India. The industry is now looking to start that,” said an executive.

 

Based on insiders, several of the businesses that have applied for the IT hardware PLI scheme have already begun laying the basis for producing components like PCBs.

 

“The packaging, India-specific sockets, keycaps, panel covers and to an extent even the display is being made here. Brands have various levels of expertise in localising these components,” one of the people said.