Applications by iPhone contract makers Foxconn, Pegatron and Wistron as well as Samsung, Karbonn, Lava and Dixon to export mobile phones worth around $100 billion from India have been cleared by the empowered group, said people with knowledge of the matter.
“The empowered committee has approved all applications estimated to export around $100 billion (Rs 7.3 lakh crore) worth mobile phones under the production linked incentive scheme (PLI) and all the applications will be placed before the cabinet probably this week,” a senior government official told ET.
Members of the empowered committee include the Niti Aayog CEO along with the secretaries of economic affairs, expenditure, revenue, the Ministry of Electronics and Information Technology (MeitY), Department for Promotion of Industry and Internal Trade (DPIIT) and Directorate General of Foreign Trade (DGFT). Five of the applicants are overseas ones, seven are Indian and another six are in the components manufacturing scheme, officials said.
Apple’s contract manufacturers and Samsung have submitted production estimates of phones worth $50 billion each in the next five years, according to the applications, said people with knowledge of the matter. Exports will be slightly lower in each case.
Scheme was Notified in April
“The extraordinary response to the PLI shows enormous trust of the global community in India’s manufacturing capability and leadership of Prime Minister Narendra Modi,” Communications & IT minister Ravi Shankar Prasad told ET.
The PLI scheme, which aims to make India a manufacturing hub for smartphones, was notified in April. Apple’s contract manufacturers started producing its latest handset models, the iPhone 11 and iPhone SE, shortly after that in India. The scheme is aimed at attracting manufacturers looking to move out of China amid Sino-US trade tensions, and even looks to draw companies from manufacturing hubs such as Vietnam. While Foxconn and Wistron already have plants running in India, Pegatron — Apple’s second-largest contract manufacturer — is looking to set up its factory and is talking to states such as Uttar Pradesh, Tamil Nadu, Karnataka and Andhra Pradesh.
Meanwhile, Samsung, which now exports phones worth about $2.5 billion from India, is all set to ramp up its production to handsets worth $50 billion in the next five years. Of this, $40 billion will comprise devices with a factory price of more than $200.
“Samsung exporting $2.5 billion out of India — of this, 97% was in the below $200 segment. By putting this floor price of $200 for eligibility in the PLI scheme, we have incentivised them to make high-value phones in the country and now they will be vacating this space of less than Rs 15,000 factory price for Indian players to occupy,” said the first official cited above. “This is an important stage as it will ensure that Indian players are able to climb up the learning curve and start making world-class smartphones to compete globally.”
The five global applicants are Samsung, two units of Foxconn, Wistron and Pegatron. The domestic ones are Lava, Dixon, Micromax, Padget Electronics, Sojo, Karbonn and Optiemus. According to government data, 22 companies had applied for the Rs 41,000-crore PLI scheme.
News Source: Economic Times