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Apple vendors, Samsung line up for mobile manufacturing

IBEF:  August 03, 2020

Applications by Taiwanese giants Foxconn, Wistron and Pegatron, which are contract manufacturers for Apple and other electronic makers such as Xiaomi, along with Samsung and other homegrown companies such as Lava, Dixon Electronics, Karbonn, Optiemus Infracom, and Micromax have been submitted under the Government’s ambitious Rs 41,000 crore (US$ 5.82 billion) production linked incentive schemes (PLI) for mobile manufacturing in India.

These companies are promising investments and employment in Indian electronic manufacturing space as the Government is planning to increase the local production over the next few years, not just to reduce imports but also to increase production for exporting.

According to an official involved, “We have received a strong response and hope to finalise the winners- who will be positioned as champion companies in the mobile manufacturing- very soon.”

Two applications are submitted by Foxconn, one under Hon Hai Precision and another under Rising Star. Similarly, Dixon Electronics and Lava have submitted two applications.

An empowered committee (EC) is made which includes NITI Aayog CEO Mr Amitabh Kant, and other senior officers, including secretaries for IT, economic affairs secretary, expenditure, revenue, and industry apart from the Director General of Foreign Trade (DGFT). This will consider the application is eligible as found by project management agency under the scheme.

Mr Ravi Shankar Prasad, Minister for Communications, Electronics and Information Technology, said, “The scheme would provide incentives of 4-6 per cent on incremental sales over the base year of 2019-20, is aimed at giving a fillip to the Government’s Make in India programme and recently launched Atmanirbhar Bharat.   

 The Government intends to select five Indian and five international companies under the scheme. These will act as the engines in promoting the growth of Indian mobile phone manufacturing not only in India but at a global level. The aim of the scheme is to position India as a strong competitive manufacturing base when compared to countries such as China and Vietnam, which have been so far been attracting massive investments.

Mr Pankaj Mahindroo, Chairman of India Cellular and Electronic Association said, “The enthusiasm towards this ‘champion policy’ will see India surging towards global leadership in mobile phone manufacturing and exports”.

So far, Foxconn have committed an investment of US$ 1 billion in India for boosting manufacturing for Apple, while Pegatron has just entered and is lining up new investments. It is seen that companies are shifting base from China and reducing their dependence on China.

According to the industry estimates, mobile manufacturing companies have the potential to get an incentive of around Rs 7,500 crore (US$ 1.06 billion) if they scale up production by about Rs 1.5 lakh crore (US$ 21.28 billion) over the next five years under PLI scheme.

The government expects to generate a cumulative manufacturing revenue potential of Rs 10 lakh crore (US$ 141.86 billion) through the PLI scheme and other ones such as those promoting electronics clusters and component manufacturing, said a ministry official.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.