Federal News
MeitY Revises PLI Scheme for AI Servers
March 23, 2026
The Ministry of Electronics and IT (MeitY) in India is currently reassessing its Production-Linked Incentive (PLI) scheme for IT hardware, with a specific focus on AI servers. This review addresses the unique cost structure of AI hardware, where high-end chips and GPUs dominate expenses, and aims to enhance domestic manufacturing and value addition in this sector. Energy constraints have been identified as a critical challenge for scaling AI infrastructure, influencing the policy reconsideration.
- The PLI scheme, valued at 17,000 crore INR as of May 2023, now targets improved incentives tailored to AI server production economics.
- Procurement professionals and contractors in the IT hardware and semiconductor sectors should evaluate how revised incentives may affect supply chain dynamics and manufacturing priorities in India.
- This policy adjustment signals increased government support for domestic AI hardware manufacturing, potentially opening new opportunities for local and international vendors aligned with energy-efficient technologies.
- Organizations involved in AI infrastructure development should consider the implications of energy constraints highlighted by MeitY when planning investments or partnerships in India.
Anything that could constrain this sector going forward is energy.
— Sushil Pal, Joint Secretary at MeitY
Agencies
Ministry of Electronics and IT
Contracts
17,000 crore INR
Locations
Sources
- AI servers drive policy rethink on PLI scheme - Industry News | The Financial Express · The Financial Express · Mar 23