Global computing giant HP is planning to manufacture all PCs sold in India locally within the next three to five years, with an eye toward exporting them afterward. This initiative aligns with the company's derisking strategy and leverages the Indian government's Production-Linked Incentive (PLI) 2.0 scheme.
According to Enrique Lores, HP's global president and chief executive, the company is already increasing production in India. The initial goal is to produce enough units locally to meet the demand within the country, and then expand to international sales. This strategy may be accelerated depending on geopolitical and economic factors.
HP has solidified its position in India's PC market and is committed to doubling its local manufacturing capacity under the PLI 2.0 scheme. In the first quarter of 2025, India's traditional PC market grew by 8.1% year-over-year, with 3.3 million units shipped. HP held the top spot with a 29.1% market share, marking a 4.6% increase in shipments year-over-year.
Ipsita Dasgupta, HP India, Bangladesh and Sri Lanka SVP and MD, stated that the company has already ramped up manufacturing from 6% to 13% in the first year of PLI 2.0, and aims to reach 35% capacity building within the next four to five years. This plan involves expanding its presence in Tier-II and Tier-III cities and strengthening relationships with MSMEs, which contribute 30% of HP's commercial business.
HP is also focusing on AI PC adoption, driven by demand from business customers. AI PCs have increased from 5% to 25% of HP's sales in India over the last six months, mirroring global trends. The company estimates that AI PCs will capture 90% of the market by 2029. Lores also noted that AI PCs are set to take over the Indian market sooner than previously expected, with 25% of the PCs shipped by HP in India over the last three quarters being AI-enabled.
In addition to expanding manufacturing, HP is growing its HP Connect stores to serve MSMEs as technology advisory centers and collaborating with the Confederation of Indian Industry (CII) to promote AI adoption. More than 7,000 MSMEs have already been trained in AI through this program.
HP has partnered with electronic manufacturing services companies like Dixon and VVDN for manufacturing laptops in India. By leveraging the financial incentives provided by PLI 2.0, HP aims to increase the proportion of locally manufactured PCs sold in India from approximately 13% to potentially one-third by 2031. The PLI scheme supports India's goal of strengthening its global position in electronics manufacturing by rewarding manufacturers for increasing production within the country. HP's expansion plans are expected to create more jobs and support the broader IT hardware ecosystem in India.
Geopolitics are also influencing HP's strategy, with a split in technology stacks between Chinese and Western approaches. HP is developing B2B applications for Ambient AI and catering to both technology stacks. A new family of computing devices that go beyond existing form factors will emerge in the next five years as ambient AI gains ground.
