Apple vendors, Samsung line up for mobile production


NEW DELHI: Taiwanese giants Foxconn, Wistron and Pegatron — contract manufacturers for Apple and other electronics makers such as Xiaomi — along with Samsung have submitted applications for the government’s ambitious Rs 41,000-crore production-linked incentive scheme (PLI) for mobile phone manufacturing in India, while homegrown Lava, Dixon Electronics, Karbonn, Optiemus Infracom, and Micromax have also evinced interest.
But Chinese manufacturers, such as Oppo and Vivo are said to have refrained from joining the fray amid recent tension due to the LAC standoff in Ladakh, resulting in investment checks on companies from the neighbouring country.
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.
“We have received a strong response and hope to finalise the winners – who will be positioned as champion companies in the mobile phone manufacturing – very soon,” a highly-placed source told TOI.
Foxconn had submitted two applications – under Hon Hai Precision and Rising Star. Similarly, on the Indian side, Dixon Electronics and Lava have submitted two applications.
An empowered committee (EC), which includes NITI Aayog CEO Amitabh Kant, and other senior officers, including secretaries for IT, economic affairs secretary, expenditure, revenue and industry apart from the Director General of Foreign Trade (DGFT) will now consider the applications, as found eligible by a project management agency under the scheme.
Telecom and IT minister Ravi Shankar Prasad had said that the scheme, that would provide incentives of 4-6% on incremental sales over the base year of 2019-20, is aimed at giving a fillip to the government’s flagship Make-in-India programme and the recently launched Atmanirbhar Bharat.
The government plans to select five Indian companies and five international giants for the scheme, and these would be positioned as the engines that would promote the growth of Indian mobile phone manufacturing not only within the country, but at the global level. The idea of the scheme is to position India as a strong competitive manufacturing base when compared to countries such as China and Vietnam, which have so far been attracting massive investments.
“The enthusiasm towards this ‘champion policy’ will see India surging towards global leadership in mobile phone manufacturing and exports,” Pankaj Mahindroo, Chairman of India Cellular & Electronics Association, said.
The recent tensions between China and the US, which have escalated after the coronavirus outbreak, are also seen as an opportunity to attract global investments. Foxconn has already earmarked fresh investments of up to $1 billion in India for boosting the manufacturing for Apple, while Pegatron has just entered and is lining up new investments. The companies are seen to be reducing their dependence on China.
According to industry estimates, mobile manufacturing companies have the potential to get an incentive of around Rs 7,500 crore if they scale up production by about Rs 1.5 lakh crore over the next five years under the PLI scheme.
The government expects to generate a cumulative manufacturing revenue potential of Rs 10 lakh crore through the PLI scheme and other ones such as those promoting electronics clusters and component manufacturing, ministry officials said.



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