Smartphone Manufacturers Open Up Production In India

Samsung Noida Facility
Samsung Noida Facility

Foxconn will reportedly invest $1 billion to expand its production capabilities in India. The planned investment is set to take place in Sriperumbur plant in Tamilnadu over the next three years. Other Global Giants including Apple Inc. contract manufacturers- Pegatron and Wistron, Electronic makers such as Samsung and LG are also eyeing to ramp up their presence in India with latter two companies reportedly investing around $1 billion.

Domestic manufacturer Lava reportedly will shift its manufacturing base of all its phones planned for exports from China to India by investing $105 million in the next five years.

These companies have made applications to the Ministry of Electronics and Information Technology (MEITY) to participate in the Production-Linked Incentive (PLI) scheme offered to global players.

Smartphone Manufacturing Facility

What is the PLI Scheme?

As part of the National Policy on Electronics, the IT Ministry notified on 1 April of a scheme that would give incentives of 4-6% to electronics companies that manufacture mobile phones and other electronic components such as transistors, diodes, thyristors, resistors, capacitors and nanoelectronic components such as microelectromechanical systems.

The foreign firms need to make a staggering venture of Rs 1,000 crore for more than four years. They would be required to make handsets with an incremental production estimation of Rs 4,000 crore in the primary year and this needs to go up to Rs 40,000 crore in the fourth year. However, incentives will be given only if these foreign companies manufacture phones which have a production value of over $200 apiece.

The PLI scheme for homegrown companies also offers similar incentives, but they have to invest only Rs 200 crore in four years. They need to have a production value of a minimum Rs 100 crore in the first year and that has to go up to Rs 3,000 crore in the fifth year to avail the incentive.

Homegrown Brands like Dixon Electronics, Karbonn, Optiemus Infracom, and Micromax have also demonstrated interest in this scheme thereby looking to make a comeback in Indian Market after losing out its market share to Chinese Companies.

It is, however, unclear whether Chinese conglomerate BBK which owns Vivo, OPPO and OnePlus have applied to this scheme or not amid recent tension due to the LAC standoff in Ladakh, resulting in investment checks on companies from the neighbouring country.

The Indian Administration intends to choose five Indian organizations and five worldwide mammoths for the plan, and these would be situated as the motors that would advance the development of Indian cell phone manufacturing inside the nation, yet at the worldwide level. Companies that submitted their proposals by the deadline on Friday are promising fresh investments and jobs in the Indian electronics manufacturing space as the government looks to boost local production over the next few years, not just to reduce imports but also to turn the country into a production hub for exports. The plan can situate India as a solid serious assembling base when contrasted with nations, for example, China and Vietnam, which have so far been drawing in gigantic ventures.

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