Production Linked Incentive Scheme (PLI) for IT Hardware Scheme 2.0

Production Linked Incentive (PLI) Scheme 2.0 for IT Hardware offers financial incentives to manufacturers of laptops, tablets, servers, all-in-one PCs, and ultra small form factor (USFF) devices in India to boost domestic production. Ministry of Electronics and Information Technology (MeitY) runs the scheme with a total budget of ₹17,000 crore.

As of August 2026, the scheme is running and 27 companies have been approved under it, including global names like Dell, HP, Foxconn, Lenovo and Asus, along with domestic contract manufacturers such as Dixon Technologies and Sahasra Electronic Solutions. Incentive payouts are expected to rise sharply in the second half of financial year 2026-27, as most approved players chose FY 2025-26 as their first year of production.

Production Linked Incentive Scheme (PLI) for IT Hardware Scheme 2.0 - Introduction

MeitY launched the PLI Scheme 2.0 for IT Hardware to build a strong domestic manufacturing ecosystem for laptops, tablets, all-in-one PCs, servers and USFF devices. The scheme gives a percentage-based financial incentive on net incremental sales of target products manufactured in India. Companies are encouraged to invest in plant, machinery, research and development. A Project Management Agency (PMA) manages the rollout of the scheme.

In 2026, reports indicate that MeitY plans to review and possibly modify the scheme in late financial year 2026-27. Artificial intelligence (AI) servers and other AI-linked hardware products may be added to the coverage of the scheme, as the government looks to keep pace with rising GPU costs and growing AI server demand. The incentive payout under the scheme has been around ₹82 crore so far.

Main aims of the scheme are to boost domestic production of laptops, tablets, all-in-one PCs, servers and USFF devices, incentivize incremental investments in technology, research and development and Transfer of Technology, improve component localization and strengthen the IT hardware supply chain, create skilled employment opportunities, and increase domestic value addition.

Key Information

Benefits

The scheme rewards manufacturers with a percentage-based incentive on net incremental sales of eligible products. The incentive is available for six consecutive years, and the rate depends on the product type and the components localized in India.

• Targeted Products: Laptops, Tablets, All-in-One PCs, Servers and Ultra Small Form Factor (USFF) devices.
• Incentive Structure: Rates start from 3% in year one and taper down in later years.
• Component Incentives: Specific percentages apply to PCBA, display panels, memory modules, SSD drives and enclosures.
• R&D Support: Special incentives are given for SoC processors designed in India and for ATMP/IC manufacturing units.
• Investment Relief: If an investment shortfall is 40% or less, the manufacturer stays eligible for a reduced incentive payout. Withheld incentives are released once investment thresholds are met in later years.

Eligibility

Companies applying under the scheme need to meet certain revenue and investment thresholds. The applicant must be a business entity registered in India and must manufacture the target products.

• The applicant must be a business entity registered in India.
• The company must manufacture target products (Laptops, Tablets, All-in-One PCs, Servers or USFF devices).
• Applicants must meet defined thresholds for incremental investment and net incremental sales over a base year.
• Global companies must meet consolidated global manufacturing revenue of ₹5,000 crore for the target segment or ₹10,000 crore for electronics hardware.
• Domestic companies must meet consolidated global manufacturing revenue of ₹10 crore for the target segment or ₹20 crore for electronics hardware.
• Applicants must ensure localization of PCBA and finished goods assembly from the first year.

Application Process

Companies can apply online through the official portal at pliithw.com. The steps are given below.

STEP 1 - Visit the official website at https://pliithw.com and register the company using the required corporate details.

STEP 2 - Complete the application form on the portal with investment and production plans, and upload all required documents including financial statements and projections.

STEP 3 - Submit the application online along with the non-refundable application fee of ₹1,00,000 paid electronically.

STEP 4 - The Project Management Agency (PMA) will review the submission and may ask for clarifications. Approved applicants receive an approval letter and can start filing quarterly, half-yearly or annual claims.

Documents

Applicants need to keep the following documents ready while applying.

• Application form as per the scheme guidelines.
• Proof of electronic payment of the ₹1,00,000 application fee.
• Self-certified statement of consolidated global revenue.
• Detailed localization plan and annual incentive projection.
• Integrity compliance certificate.
• Independent auditor's certificate regarding investment and sales.
• Chartered engineer certificate for physical verification of equipment.
• Board resolution authorizing participation.
• Undertakings for contract manufacturing arrangements.

References

• Official MeitY Website
• Official Scheme Guidelines
• PLI Scheme 2.0 Application Portal
• MeitY to revamp IT hardware PLI later this year - Economic Times

FAQ's

Which products fall under the target segment?

The scheme covers laptops, tablets, all-in-one PCs, servers and ultra small form factor (USFF) devices that are manufactured and finalized in India.

What types of investments are eligible?

Eligible expenditures include plant, machinery, equipment, tools, molds, research and development costs, and Transfer of Technology (ToT) agreements. Land and building costs are not included.

Can contract manufacturers participate?

Yes, companies can claim incentives for goods manufactured through contract manufacturers, provided the arrangement is exclusive and no duplicate incentives are claimed.

What happens if my investment falls short of the threshold?

If the shortfall is 40% or less of the required threshold, the applicant stays eligible, but the annual incentive payout is reduced proportionally. The balance is recoverable once the full threshold is met in later years.

Are there penalties for providing unrealistic production targets?

Yes. If the actual incentive claim is lower than the projected target, penalties ranging from 5% to 10% may be applied depending on the severity of the shortfall.

Will the scheme be changed in 2026?

Reports suggest MeitY may review and modify the scheme in late financial year 2026-27, possibly adding AI servers and AI-linked hardware products to its coverage. No official notification has been released yet.