Government to drop plant evaluation clause to ease shifting of mobile factories to India

By: |
June 1, 2020 8:15 PM

The Ministry of Electronics and IT (Meity) wants to go full throttle to capitalise on sentiments of the US, Japan, Taiwan and other nations looking to shift their companies' base out of China amid the COVID-19 crisis.

mobile factories,  Apple, COVID-19 crisis, electronics manufacturing companies, iPhones assemble in india, FoxconnThe government expects to generate manufacturing revenue potential of Rs 10 lakh crore and create direct and indirect jobs for 20 lakh people by 2025 through these schemes. (Representational image: Reuters photo)

The government is likely to drop a clause of evaluating plant machinery for electronics manufacturing in the recently notified Rs 48,000 crore worth incentive schemes to ease shifting of base for companies like Apple and contract manufacturers to India, according to sources.

The Ministry of Electronics and IT (Meity) wants to go full throttle to capitalise on sentiments of the US, Japan, Taiwan and other nations looking to shift their companies’ base out of China amid the COVID-19 crisis.

“Meity is likely to drop the clause to evaluate plant machinery and other capital goods at 40 per cent of the original value in the recently announced incentive schemes. The changes are likely to be notified in a day or two,” a source said.

On April 1, the government notified three schemes comprising total incentives of around Rs 48,000 crore to boost electronics manufacturing in the country. The electronics manufacturing companies will get 4 -6 per cent incentives based on certain incremental sales every year.

Apple’s iPhone assembly partner Pegatron is also planning to set up a plant in India to take benefit of the new schemes. Pegatron will be the fourth partner of Apple to set its footprint in India after Wistron, Foxconn and Compal Electronics.

At present, only Wistron and Foxconn assemble iPhones in India. Wistron has already announced to expand its operation by increasing the manpower by about 10 times to 20,000 people over the next 2 years with an initial investment of around Rs 2,000 crore.

Under the Production Linked Incentive (PLI) schemes, an electronic company has the potential to get an incentive of around Rs 7,500 crore if it scales up production to worth about Rs 1.5 lakh crore over next five years.

The government expects to generate manufacturing revenue potential of Rs 10 lakh crore and create direct and indirect jobs for 20 lakh people by 2025 through these schemes.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Gold loans account for 35% of our loan book and can go up to 45%: CVR Rajendran, Managing Director & Chief Executive, CSB Bank
2Reliance Jio develops 5G solution with Qualcomm
3Delhi HC restrains Canara Bank from flouting SC’s NPA relief order