Major Contract Manufacturer Of Apple Wins $6.65 Billion Incentives Under Make In India Initiatives, MeitY Claims India Will Produce Electronic Devices Worth More than $143 Billion In The Next Five Years

Foxconn
Foxconn

Make in India is picking up pace in the country. Reports suggest that Samsung and three other major contract manufacturer of Apple have won $ 6.65 billion incentives under India’s federal plan to boost domestic smartphone production over the next five years. In total 16 companies have won the $ 6.65 billion incentives and are en route to commence production in the subcontinent.

The companies had applied for an incentive program back in August. Major Apple partner manufacturing companies like Foxconn, Wistron, and Pegatron are among the companies that had applied. Other companies like Micromax and Lava had also applied for the incentive program.

India’s IT Minister Ravi Shankar Prasad had stated back in August about a range of incentives that will be provided under the initiative called Production-Linked Incentive Scheme. The deal was told to include schemes like a 6 percent financial incentive on additional sales of goods produced locally over five years, with 2019-2020 as the base year.

Indian Ministry of Electronics and Information Technology (MeitY), on Tuesday, said that these companies that have claimed the incentives program would produce smartphones and other electronic devices worth more than $ 143 billion over the next five years. The Indian Ministry of Electronics and Information Technology (MeitY) also said that in return for sale of electronic components produced in the country, they will be offered incentives ranging between 4 percent to 6 percent. The scheme as said earlier would be valid for five years with 2019-2020 set as the base year.

The initiative is taken with an aim to boost local manufacturing. This would also boost not only manufacturing but also exports. These manufacturing companies would also create jobs for the Indian market. As estimated, the companies starting manufacturing will help to create more than 200,000 direct employment opportunities in the next five years. They would also create more than 600,000 indirect employment opportunities during the same period, according to the ministry data. This would help the government tackle the unemployment problem of the country.

The Indian smartphone market has grown over the years. Now the international companies are eyeing to set India as their main target market and make a mark in it. The huge potential of the Indian market is also attracting brands like Apple, who for several years have neglected the Indian market but now recently have also opened up their first online store. India is the second most populated country in the world and smartphone sales have skyrocketed since the introduction of low-cost data packs. Still, a substantial portion of the community does not have a smartphone and the companies are eyeing to take in a chunk of that. India is also believed to grow to become the second-largest smartphone market in the world.

The introduction of iPhone manufacturers like Foxconn, Wistron, and Pegatron highlights how quickly the companies are looking to make a mark in the country and they are trying to depend on local manufacturing to fulfill the needs of the country. Manufacturing in India comes with its own benefits. Firstly as they would be manufactured in the country, they would bypass the tax that is levied on imports of electronics. Local labor cost is also lower than that in China. They also now have an incentive scheme that would also add to their profit. Wistron is already manufacturing in India for three years back. Pegatron would also commence production soon. Reports also suggest that flagship iPhone models would be manufactured in India which might also make them cheaper in the future.

The ministry also said, “Apple and Samsung together account for nearly 60% of global sales revenue of mobile phones and this scheme is expected to increase their manufacturing base manifold in the country. The industry has reposed its faith in India’s stellar progress as a world-class manufacturing destination and this resonates strongly with Prime Minister’s clarion call of AtmaNirbhar Bharat – a self-reliant India.”

Indian companies like Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs, and Optiemus Electronics have also received the incentives scheme. However, Chinese manufacturers like Oppo, Vivo, OnePlus, and Realme had not applied for the deal and misses out.