India’s Ministry of Electronics and Information Technology (MeitY) will reevaluate and likely modify the country’s Rs 17,000 crore IT hardware production linked incentive (PLI) scheme in late fiscal year 2026-27, potentially adding AI server hardware to the list of supported products.
- PLI 2.0 payouts expected to rise sharply in second half of FY27
- AI servers and AI-linked hardware poised for inclusion
- 27 approved companies include global and domestic manufacturers
What happened
The Indian government’s Rs 17,000 crore IT hardware production linked incentive scheme, initiated to boost domestic manufacturing of laptops, PCs, tablets, and servers, is set for revision in late fiscal year 2026-27. This follows a phase where several participating firms have started claiming incentives based on incremental sales.
Officials from the Ministry of Electronics and Information Technology (MeitY) revealed that payouts under the second iteration of the PLI scheme, notified in 2023, are poised to increase significantly. The scheme currently includes 27 approved participants such as Dell, HP, Lenovo, Foxconn, Asus, and Indian manufacturers like Dixon Technologies, with 80% electing FY25 as their first production year.
Why it matters
The planned revision aims to address the evolving tech landscape by expanding the scheme’s coverage to include AI servers and other AI-related hardware products. This adjustment reflects India’s strategic focus on emerging technologies and reducing dependence on imports, especially given ongoing global supply chain realignments.
With incentive claims expected to accelerate, a revamped PLI scheme will provide stronger support to domestic production, helping scale advanced manufacturing capabilities. This could amplify India’s position as a manufacturing hub for sophisticated IT hardware and drive further investments from both multinational firms and homegrown companies.
What to watch next
Market participants and analysts will closely monitor the government’s assessment of PLI 2.0’s effectiveness once more data on incentive disbursements and production volumes become available in FY27. Any modifications to the scheme could signal shifts in policy priorities for the sector.
The inclusion of AI hardware under the incentive framework will also be a key development. This move may accelerate domestic innovation and manufacturing in AI infrastructure, influencing supply chain decisions for major global technology companies operating in India and potentially increasing competitiveness against regional manufacturing centers.