According to the contract manufacturers of Samsung, Xiaomi, and Apple the Taiwanese giants like Pegatron, Wistron and Foxconn have submitted various applications for the ambitious project of the government’s production-linked incentive scheme (PLI) of 41, 000 crore for manufacturing of mobile phones in India while other homegrown companies like Micromax, Optiemus Infracom, Karbonn, Dixon electronics and Lava have also evinced interest.
But according to Chinese manufacturers such as Vivo and Oppo are said to have abstained from joining the bandwagon due to the LAC standoff in Ladakh and amid the recent tensions it has resulted in investment checks on all the companies that are coming from the neighboring country.
Companies have submitted their proposals before the deadline on Friday and have promised for jobs and fresh investments in the manufacturing space of Indian electronics as the government are very much looking to boost the local production over the coming few years not from the standpoint of reducing imports but they are trying to turn the country into an export’s production hub.
According to a highly-placed source who spoke to TOI and said that a strong response has been received by them as they are hoping to finalize the winners who are going to be positioned as the champion companies in the manufacturing of mobile phones.
Two applications have been submitted by Foxconn under Rising Star and Hon Hai Precision. On the Indian side, similarly, Lava and Dixon Electronics have also submitted two applications.
An empowered committee that includes the CEO Amitabh Kant of NITI Aayog and also other senior officers that includes the secretaries for Information and Technology along with the secretaries for economic affairs, industry, revenue and expenditure and also the Director-General of Foreign Trade is now going to consider the applications that are found to be eligible by an agency of project management under the scheme.
IT and Telecom Minister Ravi Shankar Prasad went on to say that the scheme is going to provide 4-6% incentives on incremental sales for the base year of 2019-20 and this is aimed at giving a fillip to the flagship Make-in-India program for the government and the recent launch of Atmanirbhar Bharat.
Five international giants and five Indian companies are planned to be selected by the govt. for the scheme and these are going to be positioned as the engines that are going to promote the growth of mobile phone manufacturing of India not only within the country but also on the global platform. The scheme has got the idea to position India as a strong manufacturing base that is competitive when compared to countries like Vietnam and China that have been attracting massive investments so far.
According to the Chairman of India Cellular & Electronics Association Pankaj Mahindroo, there has been quite a lot of enthusiasm towards this ‘champion policy’ and this will see India surging towards global leadership in the exports and manufacturing of mobile phones.
The recent tensions between the US and China that have escalated after the outbreak of coronavirus have also been seen as an opportunity to attract various global investments. Fresh investments are already earmarked by Foxconn of up to $1 billion in India for giving a boost to the manufacturing of Apple while the fresh entry of Pegatron has lined up new investments. The companies can be seen to have reduced their Chinese dependence.
According to estimates made by the industry, the companies of mobile manufacturing have the great potential to get an incentive close to Rs. 7,500 crore if the production is scaled up by an amount of Rs. 5 lakh under the PLI scheme over the next five years.
The government has been expecting cumulative revenue for manufacturing with a potential of Rs. 10 lakh crore through the scheme of PLI as well as other schemes such as the ones promoting electronic clusters as well as component manufacturing according to ministry officials.
