Mumbai-based up-and-coming IT hardware manufacturer Panache Digilife said it intends to manufacture laptops and all-in-one PCs to target the consumer market, under the government of India’s production-linked incentive scheme.
The company had qualified for receiving benefits under the PLI scheme last week, along with 13 others including Foxconn, Wistron, Dell, ICT, Dixon Technologies and Lava International.
The PLI scheme has two parts. First, the companies need to invest an x amount of rupees to set up or expand their existing manufacturing facilities. In case of Panache Digilife, the approval has been for manufacturing IT hardware.
Once they make the investment, they become eligible to get an amount to equal to 4 to 6% of the sales generated by this investment/facility from the government of India as incentive. Panache Digilife said the total benefits obtained from the government could be as high as five times what the company originally invests. The minimum investment to be committed under the scheme is Rs 20 cr.
The scheme is intended to counter the various incentives and facilities provided by other countries, particularly China, to companies based in those countries. Such incentives and subsidies, which often include cheap or free land, power and loans, played a crucial part in the rise of China as the world’s manufacturing destination in the 70s and 80s.
Thanks to such incentives, China enabled local manufacturers to make their items cheaper than their global counterparts. This in turn led to the de-industrialization of many countries, particularly the United States.
While India still has some manufacturing industries left, many of India’s manufacturing units in certain sectors like electronics and chemicals fell prey to Chinese companies.
The PLI is a an attempt at damage control by the Indian government, albeit 50 years after China started giving such incentives to its manufacturers.
The PLI scheme has met with some success in mobile phone manufacturing, but has not had much impact in IT hardware manufacturing so far.
India used to have strong players in IT manufacturing, such as HCL and Wipro, about two decades ago. But these companies have fallen prey to cheaper imports from China over the last ten years or so, making India’s IT manufacturing sector more or less barren at present.
Panache Digilife was started in the year 2000 by businessmen Amit and Nikit Rambhia who set up an assembling unit for desktop computers. They later focused on smaller form-factor computers used in commercial and industrial establishments. Recently, they have also launched all-in-one desktop computers targeted at individual consumers.
Joint MD Nikit Rambhia said the company is now planning to manufacture laptops soon and is “working on multiple design to manufacturing opportunities” for laptops for education and work from home.
“All these devices are AI enabled and are way ahead of older generation products. New designs for both Laptops and AIO are high performance & power efficient. With this PLI scheme Panache will be able to deliver latest technology at
competitive prices,” he claimed.
Chairman Amit Rambhia said the inclusion in the PLI scheme will lead to better access to funds.
“With the introduction of the PLI Scheme, there will be fresh investments in the sector, which will provide us with financial impetus but also creates and ecosystem in the IT Hardware Industry which in turn will enable us to compete with the global players,” he said.
Some more companies that have qualified under the PLI scheme are Infopower Technologies (a joint venture of Sahasra and MiTAC), Bhagwati (Micromax) Neolync, Optiemus, Netweb, Smile Electronics and VVDN.