Paytm Urges Government to Include Payment Devices in PLI Scheme to Boost Local Manufacturing

Introduction: Paytm’s Push for “Made-in-India” Fintech Hardware

Fintech giant Paytm has once again taken the lead in driving India’s digital and manufacturing agenda forward. The company, known for revolutionizing mobile payments, is now calling on the government to extend the Production-Linked Incentive (PLI) scheme to include payment devices — a move that could transform India into a hub for fintech hardware manufacturing.

Paytm recently unveiled two new 4G-enabled payment devices, the Paytm Pocket Soundbox and the Paytm Music Soundbox, both locally produced. However, founder and CEO Vijay Shekhar Sharma believes the company — and India’s broader fintech ecosystem — faces an uphill battle due to higher taxes on domestic manufacturing compared to imports.

Understanding the Paytm PLI Scheme Demand

What is the Production-Linked Incentive (PLI) Scheme?

The PLI scheme, launched by the Government of India, is designed to encourage local manufacturing by offering financial incentives tied to production output. Initially applied to industries like electronics, pharmaceuticals, and automobiles, it rewards companies that increase domestic output and reduce import dependency.

Why Paytm Wants PLI Support for Payment Devices

Paytm’s request to include fintech hardware — specifically, payment devices like soundboxes, POS terminals, and card readers — under the PLI scheme stems from a key challenge: imported devices are currently cheaper due to lower or no import duties, while locally manufactured devices are taxed heavily.

By including payment devices in the PLI framework, the government could:

Encourage local innovation and manufacturing
Reduce dependence on Chinese and Southeast Asian imports
Generate large-scale employment in assembly and design sectors
Level the playing field between domestic and global players

Vijay Shekhar Sharma’s Vision for India’s Manufacturing Future

From a Service Economy to a Manufacturing Powerhouse

At the launch of Paytm’s new devices, Sharma highlighted that India has long operated as a service-led economy. While the digital revolution has driven growth in IT and fintech, manufacturing remains underdeveloped.

He argued that expanding India’s role in hardware production is essential for creating long-term employment and building technological self-reliance.

Why Local Production Matters for Fintech Growth

Payment devices are the physical foundation of India’s cashless economy. Every Paytm Soundbox, POS machine, and QR-enabled terminal deployed represents a step toward financial inclusion. By producing these devices domestically, Paytm can ensure:

Lower production costs
Faster distribution cycles
Improved quality control
Reduced reliance on global supply chains

The Challenge: Higher Taxes on Locally Made Devices

Imported Devices vs. Indigenous Production: The Tax Disparity

According to Sharma, when payment devices are imported, no customs duties are applied. However, when the same devices are manufactured in India, they face significant taxation, including GST and component duties.

This creates a cost imbalance, making local manufacturing economically unviable without government intervention.

Creating a Level Playing Field for Indian Manufacturers

In Sharma’s words:

“Paytm soundboxes are completely made in India. We have indigenised the entire process. But when we import, there’s no duty — while domestic manufacturers pay multiple duties. I request the government to declare PLI on payment equipment.”

By equalizing the tax structure through PLI inclusion, India could unlock large-scale local production capacity, promoting “Atmanirbhar Bharat” (Self-Reliant India) in fintech hardware.

Paytm’s Commitment to Self-Reliant Manufacturing

Indigenisation of Soundboxes and Smart Devices

Paytm’s soundboxes — now an integral part of India’s merchant ecosystem — are 100% designed, developed, and manufactured in India. The company has built a local production ecosystem, sourcing components domestically wherever possible.

Local Assembly and Supply Chain Partnerships

Through partnerships with Indian component suppliers, Paytm is helping strengthen the local supply chain. Its manufacturing facilities employ Indian engineers and technicians, ensuring that every Paytm device contributes to homegrown skill development.

The Launch of Paytm’s 4G-Enabled Soundbox Models

Paytm Pocket Soundbox: Portability Meets Innovation

The Paytm Pocket Soundbox is a game-changer for small merchants and gig workers. Roughly the size of a debit card, it’s compact, wireless, and instantly announces payment confirmations in multiple languages.

This helps merchants avoid fraud, maintain real-time transaction records, and operate efficiently in busy environments.

Paytm Music Soundbox: Where Transactions Meet Entertainment

The Paytm Music Soundbox combines payment alerts with music streaming — offering both functionality and entertainment. Designed for small stores and cafes, it transforms payment acceptance into a more engaging experience for both merchants and customers.

Together, these devices reflect Paytm’s hardware innovation mindset, showing that fintech growth isn’t just about apps — it’s also about physical infrastructure.

How Paytm’s Devices Empower India’s Merchants

Transforming Merchant Payments in Tier 2 and Tier 3 Cities

With millions of small merchants across India, especially in semi-urban and rural areas, soundboxes have become a symbol of digital empowerment. They bring instant payment transparency and trust, especially for those with limited access to smartphones.

Creating Digital Inclusion Through Sound Technology

Paytm’s devices promote financial literacy and inclusion, giving small business owners the confidence to adopt digital payments. This is particularly impactful in markets transitioning from cash-based transactions to UPI and QR code systems.

The Economic Impact of Including Payment Devices in PLI Scheme

Boosting Domestic Manufacturing and Employment

If the Paytm PLI scheme proposal is implemented, it could spur:

Thousands of new jobs in hardware assembly and logistics
Increased domestic R&D investment in fintech devices
Reduced import dependency for payment equipment

This would also align with India’s broader manufacturing missions — such as “Make in India” and “Digital India.”

Enhancing India’s Position in the Global Fintech Hardware Market

Globally, fintech hardware (POS devices, card readers, and IoT-enabled payment systems) is a $25+ billion industry. With government support, India could capture a major share of this market — exporting indigenous technology worldwide.

Expert Opinions and Industry Perspectives

Why Industry Leaders Support the Paytm PLI Scheme Proposal

Analysts and policy experts argue that Paytm’s PLI inclusion request is strategic and timely. The success of the PLI schemes in mobile and electronics manufacturing has already boosted local output and exports. Extending similar benefits to fintech hardware could replicate that success.

How It Aligns With India’s “Digital India” and “Make in India” Goals

By incentivizing local production of payment devices, the government would simultaneously support two flagship programs:

Digital India: Expanding digital financial inclusion
Make in India: Strengthening the domestic manufacturing ecosystem

The Road Ahead for Paytm and India’s Fintech Hardware Sector

Policy Expectations and Potential Government Response

While there’s no official announcement yet, industry insiders expect the Ministry of Electronics and IT (MeitY) and Department for Promotion of Industry and Internal Trade (DPIIT) to evaluate Paytm’s proposal.

If approved, it could mark the first-ever PLI extension for fintech hardware.

What the Future Holds for India’s Fintech Manufacturing Revolution

Paytm’s initiative could inspire other fintech players — PhonePe, Pine Labs, and BharatPe — to localize their hardware manufacturing. This would create a multi-billion-rupee domestic fintech hardware market over the next five years.

FAQs About Paytm PLI Scheme and Fintech Manufacturing

1. What is the Paytm PLI scheme?
It refers to Paytm’s proposal to include payment devices like soundboxes and POS machines in India’s Production-Linked Incentive (PLI) scheme to boost domestic manufacturing.

2. Why is Paytm requesting PLI inclusion?
Because imported devices currently enjoy tax exemptions while locally made devices face higher duties, making domestic production costlier.

3. What devices has Paytm launched recently?
The Paytm Pocket Soundbox and Paytm Music Soundbox, both 4G-enabled and made in India.

4. How would PLI inclusion help India’s economy?
It would create jobs, boost local manufacturing, reduce imports, and encourage innovation in hardware-based fintech solutions.

5. How does this fit with government initiatives?
It aligns perfectly with “Digital India,” “Make in India,” and “Atmanirbhar Bharat.”

6. Who benefits from the proposed Paytm PLI scheme?
Both Indian manufacturers and small merchants, as it would lower costs and expand access to affordable, high-quality payment devices.

Conclusion: A Turning Point for India’s Fintech Manufacturing Landscape

Paytm’s call for PLI inclusion isn’t just about company growth — it’s about transforming India into a fintech manufacturing powerhouse. By leveling the tax disparity between imported and domestic devices, the government could empower startups, create jobs, and make India a global hub for payment hardware innovation.

As Vijay Shekhar Sharma aptly puts it:

“We’ve made soundboxes in India. Now, we need to make India the soundbox of the world.”

If the government supports this initiative, the Paytm PLI scheme could mark the start of a new industrial revolution in fintech hardware — powered by innovation, inclusion, and Indian ingenuity.

🔗 External Source: Make in India – Official Site

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