India has shortlisted 16 domestic and global electronics makers to promote manufacturing in Asia’s third largest economy under a $6.6 billion stimulus program.
The Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing by the government of India proposes a financial incentive to boost domestic manufacturing and attract large investments in the electronics value chain including mobile phones, electronic components and ATMP (Assembly, Testing, Marking and Packaging) units.
According to a government statement, domestic companies include contract manufacturers Dixon Technologies Ltd and Optiemus Infracom Ltd and phone manufacturers Lava International Ltd., UTL Neolyncs and Micromax Informatics. Among the foreign companies that have made the cut for production-related incentives are Samsung Electronics Co., Rising Star and contract suppliers to Apple, Foxconn Technology Group and Wistron Corp.
For manufacturers opting for the scheme, incentives will be offered in each of the next five years. India expects domestic and global companies to expand production and exports substantially over the next five years. In the case of mobile phones, domestic value addition is anticipated to rise from 15-20 percent at present to 35-40 percent and 45-50 percent for electronic components, it said in a statement.
Subsidies for producing mobile phones with factory costs of up to $200 have been allocated primarily to Indian companies with a similar incentive system (4%-6%). According to media reports, up to 80% of such smartphones are already being manufactured in India.
In July, five domestic companies submitted applications under the mobile-domestic category, with Dixon Technologies and Lava each submitting two applications. The other applicants were Micromax, Karbonn and Optiemus Infracom.
India’s smartphone market
Together, Apple and Samsung account for almost 60 percent of global mobile phone sales revenue and this scheme is expected to expand their manufacturing base in India. Samsung, which over the last few years had lost market share to Chinese players like Xiaomi, Redmi and Oppo, might look to rebound.
Under the Specified Electronic Components Category, six companies secured approval, including AT&S, Ascent Circuits, Visicon, Walsin, Sahasra and Neolync.
Ravi Shankar Prasad, India’s Union Minister for Electronics & IT, was quoted as saying in a statement that the industry has restored its confidence in the stellar growth of the country as a world-class manufacturing destination. “We are positive and look forward to developing a strong ecosystem and integrating it with the global value chains to improve the country’s electronics manufacturing ecosystem,” he said.