Samsung & iPhone Manufacturers Foxconn, Winstron, & Pegatron Apply for Production Linked Incentive in India

Wistron plant Bengalore to expand
Wistron plant Bangalore to expand

Foxconn, the largest manufacturer of Apple’s iPhone has applied for India’s $6.65 billion scheme along with Wistron Corporation, an original design manufacturer in Taiwan and Pegatron Corp, another iPhone assembler based in Taiwan. The tech minister informed on Saturday that the companies will be offered cash incentives (4 to 6 percent) on additional sales of the devices made locally over five years through production-linked incentives (PLI). The companies could apply for the scheme from July 31st. The government has set Rs. 15000 as the minimum retail invoice price per unit for the international companies to avail of the scheme.

Foxconn and Wistron already have two factories in Chennai and Bengaluru. Currently, Apple is producing iPhone 11 via these plants. Pegatron is yet to open up any factory in India, but has several ongoing talks and could be invested in India pretty soon.

The technology minister Ravi Shankar also informed that Samsung Electronics Co Ltd, a South Korean based conglomerate that boasts the second-largest market share in the Indian smartphone market, has also applied for production-linked incentives (PLI).

He added that Chinese Lenovo phone assembler Lava, Dixon Technologies, Micromax Informatics, and Padget has also applied for PLIs. The Ministry of Electronics and Information Technology (MeitY) also announced that as many as 22 local and international smartphone manufacturers alongside 40 electronic component manufacturers have applied for PLI.

Our take on the matter:

The Prime Minister’s decision to emphasize on local manufacturing of the smartphones to create jobs is a welcoming decision for most of the Indians. It also comes with a promise of lowering the smartphone costs. The government estimates that roughly Rs. 11.5 lakh crore worth of goods will get produced by the companies that have applied for PLIs, over a time period of five years. Nearly 60 percent of the goods are expected to be exported.

With over half a billion smartphone users, India is one of the most important markets for all smartphone merchants. India comprises of roughly 350 million users still on basic phones. This is a huge opportunity for growth for all the manufacturers. With cheaper labor than that of China, the labor cost will also go down for the company.

India is aiming to take China’s role in being a production hub of the world. This will also help the “Make in India” program that the government had launched. The minister of technology, Ravi Shankar Prasad commented, “This particular scheme is not against any country. I do not wish to take the name of any country. We have got rules and regulations with regard to our security of the country. All those compliances are very important”. The minister also informed that this initiative will directly provide jobs to 3 lakh people. While this will provide jobs to another 9 lakh people indirectly.

Foxconn Chennai
Foxconn Chennai

Reuters last month informed that Foxconn is looking to expand its Tamil Nadu based plant. These are undoubtedly steps to India’s dream of becoming self-dependent.




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