Amidst the trade war between China and the US, and the severing of ties between several other countries and China due to the pandemic, India found itself in a good position to replace China as the manufacturing hub of the world. Foreseeing this new opportunity, the Indian government went to work and on Tuesday and announced incentives for 16 companies worth $6.65 billion to boost smartphone manufacturing in India under the PLI scheme (Performance-linked incentives).
These 16 firms include one of the largest smartphone manufacturers Samsung and manufacturing partners of Apple – Foxconn, Wistron and Pegatron. These companies have been assigned the task of producing electronic components and smartphones over the next five years, the combined value of which will be a staggering $143 billion. As an incentive, the Indian government will give them incentives worth 4% to 6% on additional sales of locally produced goods.
Of the overall produced goods under this new initiative, 60% of it is to be exported, according to the Indian Ministry of Electronics and Information Technology (MeitY). This movie also aims to slightly solve India’s unemployment issues. The ministry said, the assigned companies will create more than 200,000 direct job opportunities and 600,000 indirect job opportunities in the next five years.
Of the 16 firms, Indian smartphone manufacturing companies such as Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics have also got the approval for the incentives. Six companies have received the approval for the specified electronic components segment, they are AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, and Neolync.
The Indian Ministry of Electronics and Information Technology 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.” It added, ” 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”.
The PLI scheme was laid out by the Indian government in April this year, and the news of big players such as Samsung, Apple partners and Micromax applying for this scheme came out in August. Incentives under the PLI scheme are active from August 1, 2020, with the base year set as 2019-20. According to Telecom and IT minister, Ravi Shankar Prasad, the scheme has been a huge hit in terms of applications filed, with more than 22 applicants from both foreign and domestic players.
