Samsung, Apple to boost cellphone manufacturing in India

Joanna Estrada
August 1, 2020

Apple Inc's AAPL.O Taiwan contract manufacturers Foxconn 2317.TW , Wistron Corp 3231.TW and Pegatron Corp 4938.TW have applied for India's $6.65 billion scheme to boost local smartphone manufacturing, the country's tech minister said on Saturday.

The global cellphone manufacturing companies that have applied under the scheme are Samsung, Rising Star and three Apple contract manufacturers - Foxconn Hon Hai, Wistron and Pegatron.

In light of the enthusiastic response from the industry, the government estimated that over the next five years, it will lead to production of mobiles and components worth Rs 11.5 lakh crore.

The proposals submitted by the companies to the Ministry of Electronics and IT to avail benefits of the Production Link Incentives (PLI) are expected to create 12 lakh employment opportunities - 3 lakh direct and around 9 lakh indirect jobs, a source told PTI.

As per government statistics for applications to the Rs 41,000-crore PLI scheme, 22 companies have sought incentives.

Prasad listed companies that have applied for the PLI.

Meanwhile, it has been confirmed that over 22 applications were received, under the scheme. These include Samsung, Foxcon Hon Hai, Rising Star, Wistron and Pegatron. Prasad said Indian companies, including Lava, Dixon Technologies, Bhagwati (Micromax), Padget Electronics, Sojo Manufacturing Services and Optiemus Electronics, have applied under the scheme and 10 companies have filed applications under the Specified Electronic Components Segment. "The benchmark for worldwide companies was that they make mobile phones priced at or above Rs 15,000".

The Chinese companies, including Xiaomi, had been facing a backlash in India, owing to the Sino-India border tensions.

The scheme, called Production-Linked Incentive Scheme, will offer a range of incentives to companies including a 6% financial incentive on additional sales of goods produced locally over five years, with 2019-2020 set as the base year, India's IT Minister Ravi Shankar Prasad said in a press conference. The minister said India is not averse to investment from any country but companies will have to follow rules related to security clearance, etc. The government notified production linked incentive scheme for large scale electronics manufacturing, the scheme for promotion of manufacturing of electronic components and semiconductors, and the modified electronics manufacturing clusters (EMC 2.0) scheme.

Prasad made the remarks while addressing the media to explain the Centre's PLI scheme, adding that initiatives such as Digital India and Make in India have been "transformative programmes". Out of the total production of ₹11,50,000 crore in the next 5 years, more than 60% will be contributed by exports of the order of ₹7,00,000 crore, he said.

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