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Production Linked Incentive Scheme (PLI) for IT Hardware Scheme 2.O

The scheme aims to promote domestic manufacturing of Laptops, Tablets, All-in-One PCs, Servers, and Ultra Small Form Factor (USFF) devices in India through production-linked financial incentives.

Authority

Central

Region

Central Government

Status

Verified 2026

Updated

March 2026

What you get

The scheme provides a financial incentive for the net incremental sales of goods manufactured in India and covered under the target segment. | - Target Segment Products: The tangible benefits apply to the manufacturing of Laptops, Tablets, All-in-One Personal Computers (PCs), Servers, and Ultra Small Form Factor (USSF) devices. | - Incentive Rates (Year 1 → Year 6): | - Assembly of Laptops/Tablets/All-in-One PCs/USFF: 3% → 0% | - Assembly of Servers: 3% → 0% | - PCBA: 1.20% → 0.90% | - Display Panel: 1.49% → 1.12% | - Memory Modules: 0.95% → 0.71% | - SSD: 0.95% → 0.71% | - Cabinets/Chassis/Enclosures: 1.49% → 1.12% | - SoC Processors designed in India: 3.24% → 2.43% (up to 3.78% → 2.84% for Servers) | - Additional incentives available for ATMP and IC manufacturing in India | - Investment Shortfall Relief | - If investment shortfall is ≤40% of the threshold, incentive is still payable (with partial deduction of X/2%) | - Withheld incentive is refunded without interest once the investment threshold is met in a later year. | Duration: Incentive given for 6 consecutive years within the scheme tenure | Frequency: Claims can be filed quarterly, half-yearly, or annually | Filing Deadline: Claims must be filed within 9 months from the end of the relevant financial year

Who can apply

The applicant must be a company registered in India.; The applicant should propose to manufacture goods covered under the Target Segment.; The applicant must meet the threshold criteria of Incremental Investment.; The applicant must meet the threshold criteria of Net Incremental Sales of manufactured target segment goods over the base year.; The applicant should meet the qualification criteria based on Consolidated Global Manufacturing Revenue for Financial Year 2021-22.; The applicant under the Global Company category must have a Consolidated Global Manufacturing Revenue greater than ₹50,00,00,00,000/- (5,000 crore) for the target segment or greater than ₹100,00,00,00,000/- (10,000 crore) for electronics hardware.; The applicant under the Domestic Company category must have a Consolidated Global Manufacturing Revenue greater than ₹1,00,00,000/- (10 crore) for the target segment or greater than ₹2,00,00,000/- (20 crore) for electronics hardware.; The applicant must localise at least Printed Circuit Board Assembly (PCBA) and assembly of finished goods from the first year.

Required Paperwork

  • Aadhaar Card
  • PAN Card
  • Income Certificate
  • Residence Proof (Domicile)

Common Questions

What products are covered under the "Target Segment" of this scheme?

The target segment includes Laptops, Tablets, All-in-One Personal Computers (PCs), Servers, and Ultra Small Form Factor (USSF) devices. To be eligible, these must be manufactured in India and be complete in all respects for sale to consumers.

Who is considered an "Applicant" under the scheme?

An applicant is a company registered in India that proposes to manufacture goods covered under the target segment and submits an application for approval. Manufacturing can occur at new or existing facilities across one or more locations in India.

What are the different categories of companies that can apply?

There are three categories: | - Global Company: Non-domestic companies with high global manufacturing revenue.- Domestic Company: Companies owned by resident Indian citizens (more than 50% capital).- Hybrid (Global/Domestic) Company: A category where both global and domestic companies can apply based on specific revenue thresholds

What types of investments are eligible for determining threshold criteria?

Eligible investments include expenditure on Plant, Machinery, Equipment, and Associated Utilities (including tools, dies, moulds, etc.), Research and Development (R&D), and Transfer of Technology (ToT) agreements. Expenditure on land and buildings is explicitly excluded.

Are there mandatory localization requirements?

Yes. Applicants are required to localise at least Printed Circuit Board Assembly (PCBA) and the assembly of the finished goods starting from the first year. In each subsequent year, at least one additional component or sub-assembly must be localised.

How is the incentive calculated if there is an investment shortfall?

If the cumulative investment shortfall is 40% or less of the required threshold, the applicant remains eligible. However, the incentive for that year will be reduced by half of the percentage of the shortfall (e.g., a 30% shortfall results in a 15% incentive deduction).

Can an applicant claim incentives for products manufactured through a contract manufacturer?

Yes, incentives can be claimed on sales of goods manufactured through a contract manufacturer, provided the arrangement is exclusive for the PLI applicant and the contract manufacturer has not claimed incentives for the same goods under any other PLI scheme.

What happens if an applicant’s actual incentive claim is much lower than their projection?

To ensure realistic targets, penalties apply: a 5% deduction if the shortfall is between 25% and 50% of the projection, and a 10% deduction if the shortfall exceeds 50% of the projection. No penalty applies if no incentive is payable for that year.

Is there a limit on the total incentive an applicant can receive?

Yes, there is an overall ceiling on the total incentive payable to any applicant during the scheme's tenure. This ceiling includes incentives gained from over-performance and any incentives received under the previous PLI Scheme 1.0 for IT Hardware.