PLI scheme: Apple, Samsung, Lava, Micromax apply even as Chinese firms Xiaomi, Oppo, Vivo stay away

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Updated: Aug 02, 2020 11:42 AM

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 to about Rs 1.5 lakh crore over the next five years under the PLI scheme.

Chinese firms like Oppo, Vivo, Realme and Xiaomi stayed away and have not applied under the scheme.

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

The three contract manufacturers of US major Apple — Foxconn Hon Hai, Wistron and Pegatron — as well as South Korean major Samsung have applied under the scheme, which aims to make the country a hub for mobile manufacturing aimed at export market.

Rising Star, a company owned by Foxconn, which makes devices for several mobile firms, has also applied under the scheme. Among the domestic companies, Lava, Dixon Technologies, Bhagwati (Micromax), Padget Electronics, Sojo Manufacturing Services and Optiemus Electronics have applied. Around 10 companies have filed applications under the specified electronic components segment, which include include AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, Vitesco and Neolync.

The international firms have proposed production to the tune of Rs 9 lakh crore in the next five years.

Briefing reporters, telecom and IT minister Ravi Shankar Prasad on Saturday said Apple (37%) and Samsung (22%) 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. The scheme is to promote five global and five local firms.

However, Chinese firms like Oppo, Vivo, Realme and Xiaomi stayed away and have not applied under the scheme, which could be a direct fallout of the recent border tension with China. Asked about the Chinese players and whether the firms were barred from applying, Prasad said, “Let me be very clear, this particular scheme is not against any country, it is only India-positive…I don’t wish to take the name of any country or of the company of any country. We have got proper rules and regulations with regard to our security, the bordering countries and all those compliances are very important”.

Over the next five years, the scheme is expected to lead to total production worth around Rs 11.5 lakh crore. Companies under mobile phone (priced above Rs 15,000) segment have proposed a production of over Rs 9 lakh crore, while the domestic firms have proposed a production of about Rs 2 lakh crore. The firms under specified electronic components segment have proposed a production of over Rs 45,000 crore.

The scheme is expected to promote exports significantly. Out of the total production of Rs 11.5 lakh crore, around Rs 7 lakh crore will come from exports. The scheme will bring additional investment in electronics manufacturing to the tune of Rs 11,000 crore.

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 to about Rs 1.5 lakh crore over the next five years under the PLI scheme.

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