Saturday, 08 August, 2020

Foxconn, Samsung apply for India's smartphone scheme

Apple’s partners and Samsung apply for India’s $6.6 billion local smartphone production program PLI scheme: Welcome to India, says government to Apple and Samsung; Chinese firms give it a miss
Cecil Davis | 02 August, 2020, 08:19

As reported by TOI in its edition on Saturday, Apple's contract manufacturers, Wistron, Pegatron and Foxconn, Korean giant Samsung along with Indian players such as Dixon Lava and Micromax will manufacture mobile phones under the government's production-linked incentive scheme.

Samsung has a plant on the outskirts of New Delhi that it describes as the world's biggest mobile phone manufacturing plant. "Apple and Samsung, India welcomes you with attractive policies".

The PLI scheme for large scale electronics manufacturing was notified on April 01 and it was open for filing applications till July 31 (Friday). The incentives are applicable under the scheme from August 01 (Saturday).

As per the plan, the government is offering a financial incentive of as much as 6% on incremental sales of goods made in the country for a period of five years. He said the companies estimate they will produce smartphones and components worth $153 billion during the five-year duration.

The ministry of electronics and information technology (Meity) has received applications from 22 worldwide and domestic firms under the Rs 41,000-crore production linked incentive (PLI) scheme.

Briefing reporters, telecom and IT minister Ravi Shankar Prasad on Saturday said Apple (37%) and Samsung (22%) together account for almost 60% of global sales revenue of mobile phones and this scheme is expected to increase their manufacturing base manifold in the country.

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"We are optimistic and looking forward to building a strong ecosystem across the value chain and integrating with the global value chains, thereby strengthening electronics manufacturing ecosystem in the country", Prasad said.

Meanwhile, around 8-10 companies have filed applications for component manufacturing which include motherboard maker AT&S, Ascent Circuits, Sahasra and Vitesco.

Out of the total production, companies under Mobile Phone (Invoice Value ₹15,000 and above) segment have proposed a production of over ₹9-lakh crore, the companies under Mobile Phone (Domestic Companies) segment have proposed a production of about ₹2-lakh crore and those under Specified Electronic Components segment have proposed a production of over ₹45,000 crore.

Highlighting the benefits of the scheme Prasad said, "These companies will create 3 lakh direct while close to 9 lakh indirect jobs. Besides this, we have received commitments to make mobile phone and parts worth Rs 11.5 lakh crore", Prasad said. The move could boost the value of phone output to 11.5 trillion rupees in the next five years, he said.

Prasad also claimed that the scheme is India positive but not against any country. If the manufacturers achieve that, it would significantly enhance annual exports of phone handsets from the existing $3 billion. "Now expand your presence in the country", he said. Ravi Shankar Prasad, without naming any country, reiterated that these rules on security and investment will need to be complied with.