Cellphone handset manufacturing in India is on a sharp rebound, having more than overcome the blip suffered over 24 months ago from the halting of production at Nokia’s Chennai facility. Foxconn is redoubling efforts to push a proposal for a full-fledged handset manufacturing plant in India, for which Foxconn’s Head of Apple Project, Louis Woo had a meeting with Communications and IT Minister Ravi Shankar Prasad a little over a fortnight ago. The Taiwanese vendor could join the list of equipment manufacturers that have forwarded proposals totaling about Rs 8,141.26 crore under a government flagship incentive scheme over the last two years. Of this, proposals cumulatively worth Rs3,047.13 crores have already been approved.
Woo, Foxconn’s Apple project head, discussed the Taiwanese contract manufacturer’s India plans in his meeting with Prasad and raised concerns about delays in an earlier proposal for setting up a production facility in Maharashtra. “Apple is exploring the options (to manufacture their products) in India. Foxconn’s in-charge of Apple’s manufacturing operations had come to meet me. They’ve shown a great interest in our market because over 56 per cent of their sales is from India,” Prasad told The Indian Express in a recent interview.
Sources in the Department of Telecommunications said that Woo, along with two other officials, met Prasad on April 21 to discuss their plans of setting up a multi-billion dollar manufacturing unit in Maharashtra. A memorandum of understanding was signed between the state and the company for the same last year.
During the meeting, sources said, Prasad apprised Foxconn of the major policy initiatives taken by the NDA government that would benefit those manufacturing electronics locally.
Most of the telecom manufacturing proposals that have come in so far, have been routed through the Modified Special Incentive Package Scheme (M-SIPS), which provides financial incentives to offset disability and attract investments in the manufacturing of electronics products (including telecom). The scheme is available for both new projects and expansion projects. Under the M-SIPS, for telecom, investment proposals worth Rs 8,141.26 crores have been received and proposals worth Rs 3,047.13 crores have been already approved, officials indicated.
According to the Ministry of Communications, since May 2014 till March 2016, cumulative investment proposals worth about Rs1.05 lakh crore have been received in DeitY under the M-SIPS for projects that, apart from telecom, include the verticals of display fab, solar, automotive electronics, electronic components and consumer electronics.
Officials indicated that major investors that have forwarded proposals include Bosch, Continental, GE, Sterlite, Mundra Solar, LG, Haier, Flextronics, SFO Technologies, Lava, Micromax, Karbonn, BHEL, Bharat Electronics Ltd, Jabil, Amphenol Interconnect India Pvt. Ltd., Tata Power, Harman, Shogini, Magneti Merelli, Calsonic Kansei, Vihaan Networks, Hero Moto Corp, Salcomp, Syscom and Perto.
In July 2015, the government had approved the extension and expansion of the M-SIPS to cover 15 new product categories that were not covered earlier and some simplifications were introduced — including allowing M-SIPS incentives from the date of submission of application; disbursement of incentives on a quarterly basis as against annual basis under the earlier scheme and allowing M-SIPS in any part of the country as against only in notified areas.