HP to double India manufacturing under PLI 2.0, eyes 35% scale-up in coming years

India’s traditional PC market grew 8.1 per cent year-over-year (y-o-y) in Q125, with 3.3 million units shipped, according to data from the International Data Corporation (IDC). HP retained its leadership in India’s PC market with a 29.1 per cent share in Q125, growing shipments by 4.6 per cent year-on-year.

Ipsita Dasgupta, SVP and MD, HP India, Bangladesh and Sri Lanka, said the company is slated to double its manufacturing capacity in India under PLI 2.0, going from about 6 per cent to 13 per cent in the first year. The company aims to scale this to nearly 35 per cent over the next few years, while also deepening its presence in tier-II cities and strengthening its focus on MSMEs, which already account for 30 per cent of its commercial business. 

With the PC market seen as largely mature, is growth now limited to markets like India, particularly tier-II and III cities, or are replacement cycles driving demand across both commercial and consumer segments globally?

The reason we see such dramatic growth in India versus globally is not because the PC market has saturated. Households in the US, Western Europe and other markets have multiple PCs at home. The penetration of PCs is far higher. While there may not be the same growth rates due to refreshments, the opportunity is in emerging markets. A market like India has less than 20 per cent PC penetration. In 2019, market penetration in homes was at high single digits, but it has doubled since. There is still an opportunity in India and similar markets from a PC penetration and growth perspective. 

Secondly, in terms of technology use, we’ve been in a consumption economy. It’s much harder to do productive work on devices like phones and tablets. The value of doing productive work on PCs will be the turning point to meet the requirements of workforce capabilities. From a PC perspective, we have seen enormous growth in the last year in the commercial segment, both in the MSME sector, like in tier II and III cities, and in Indian companies, including GCCs.

On the consumer side, we experienced some slowdown in the first two quarters, particularly toward the end of India’s last fiscal year. When the economy dropped from 8.2 per cent to 6.4 per cent, there was some softness in the consumer PC segment. But we’ve seen an uptick in the last three-four months and the last quarter, especially with the back-to-school and college timing. As we enter the festive season, we will see consumer growth in PCs and printers.

Has the AI PC campaign helped drive demand, given perceptions that consumer benefits are still unclear?

We had predicted that the first set of people adopting AI PCs would be commercial customers while considering cost savings and employee productivity. On the commercial side, in the last six months, AI PCs went from being 5 per cent of all our sales to 25 per cent today. Globally, a third of PCs sold today are AI PCs. We predict that by 2029, 90 per cent  of the market will be AI PCs.

The Indian government is strongly pushing domestic manufacturing. How have you scaled up your own plants in the country? Do you foresee a time when nearly all your products sold here will also be made here?

Under the PLI 2.0 scheme, we partnered with Dixon Technologies and have begun manufacturing. We had committed to the government that in May 2025, our first PCs, including notebooks, all-in-ones, and desktops, would be out, which we have delivered. By adding PLI 2.0, we had already doubled our manufacturing capacity in India. We were manufacturing around 6 per cent and will be manufacturing around 13 per cent by the end of year one, gradually increasing those numbers. Over the next four or five years, we foresee it reaching 35 per cent.  

What challenges do you face in tier II and III markets, and how quickly do you expect them to adopt AI PCs?

The tier II and III sectors have been important and have been covered well, solely because we’re a partner-first company. We have over 5,000 partners reaching out country-wide. A challenge for small business owners is the difficulty in accessing our products and devices. They would either search online or walk into one of our 750 HP World Stores. We have different products in our consumer and commercial line-ups. So, we launched a brand last year under my leadership called HP Connect, which is a customer welcome and demo centre with the latest products — from our Poly devices to collaboration devices, printers and PCs.

As an MSME, you can walk in and have a consultative conversation about the business goals and problems you’re trying to solve, following which a tech solution is put in place. When we delved deeper, we found out that these companies don’t have IT help in-house or CIOs. So, they almost treat these centres like their CIO or IT help desk. 

We have eight HP Connect stores that are live, and four more will go live later this year. Though we have a few in metros, the majority are in tier II and III. They’ve been successful for the MSME community. On our commercial side, MSMEs are about 30 per cent of our business and continue to grow. It is our fastest-growing segment by far.

Another thing we recognised is that AI can be intimidating for an MSME that lacks the deep pockets large companies have to experiment with AI and teams to recheck the work an AI capability is spitting out. From various conversations, we learned that MSME owners required someone to teach how to deliver and build AI capabilities within the organisation. We partnered with the Confederation of Indian Industries (CII) early this year and launched the CII HP Centre for AI to promote an easy adoption of AI capabilities for MSMEs across the country.

We have trained over 7,000 MSMEs across 20 cities in India. It’s a six-hour AI immersion class with AI hacks for different professionals within an organisation — whether finance, marketing, sales, or HR. Some large enterprises also participated and claim to have benefited from this initiative.

We’re also working on a tool to assess the level of readiness of an SME to start digitising efforts and a productivity boost. Studies indicated that digitised SMEs are twice as successful in profitable growth as those that aren’t.

While you hold a strong share in the PC segment, how is your presence evolving in other categories like printers?

Our portfolio includes PCs, print, and collaborative tools like video conferencing devices, headsets, and peripherals. PCs are essential for our growth. When I have conversations with the government today, there is a mutual realisation that building curricula and schools are important, and putting a productive device may help them assist in learning, making our population educated and skilled enough.

From a printer’s perspective, it’s different. A lot of India doesn’t print at home and instead goes to print shops run by micro-entrepreneurs. We try to understand their difficulties and how quickly our service capabilities can be delivered to them.

We are doing some path-breaking work on privacy. India has not been that concerned about privacy in the past. On WhatsApp, we will send important documents to the print shop. Now, we feel that the country is moving towards wanting the same levels of privacy as any other economy. We are doing a lot in R&D to protect privacy and security on printers to prevent hacking.

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