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India to revisit hardware incentives after struggling to move manufacturers out of China

Minister laments Dell, HPE and pals have the market locked up and little incentive to change

India will tweak the incentive scheme it offers to manufacturers of enterprise hardware after disappointing uptake.

"The IT hardware is not a high growth market, it is a very set market," IT minister Rajeev Chandrasekhar told India's Business Standard

"There are only four to five players and almost all of their manufacturing is in China. The players are known – HP, Dell, and Apple, among others, and some Chinese brands," he added, concluding "Therefore, there is not much incentive for too many companies to come here and make investments and the first round of PLI reflected that."

India can point to some successes in its effort to have multinationals make more kit on its soil: Apple has moved more work to India and over the weekend was rumored to be relying on the nation for early supplies of this year's new model iPhones. HPE has also increased its local efforts.

But Chandrasekhar said India is talking to big manufacturers about the kind of incentives that would see them move more work from China to India.

India also has a big stick it is yet to deploy: tying participation in a national cloud platform to local manufacturing.

News that the minister feels the incentive scheme needs a review comes after India's attempt to lure semiconductor manufacturers to its shores also produced less-than-stunning results. Established chipmakers largely passed up the nation's offers and untested manufacturers used the scheme to create greenfield facilities – making unremarkable products that won't put India on the map as a semiconductor powerhouse, or help it achieve self-sufficiency.

The US and Europe, meanwhile, have substantially outbid India with massive subsidies that aim to grow existing industries and ensure they have reliable and secure supply chains.

India is a long way from enjoying that status – for silicon or other hardware. ®

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