PLI Scheme to herald a new era in mobile phone...

The Production Linked Incentive Scheme (PLI), has been huge success in terms of the applications received from Global as well as Domestic Mobile Phone manufacturing companies and electronic components manufacturers. Industry has reposed its faith in India’s stellar progress as a world class manufacturing destinations.

Production Linked Incentive Scheme (PLI)for Large Scale Electronics Manufacturing was notified on 1st April, 2020. PLI Scheme extends an incentive of 4% to 6% on incremental sales (over base year) of goods under target segments that are manufactured in India to eligible companies, for a period of five years subsequent to the base year (FY2019-20). The scheme was open for filing applications till 31.07.2020. Incentives are applicable under the scheme from 01.08.2020. 

A total of 22 companies have filed their application under the PLI Scheme. The international mobile phone manufacturing companies that have applied under Mobile Phone (Invoice Value INR 15,000 and above) Segment are Samsung, Foxcon Hon Hai, Rising Star, Wistron and Pegatron. Out of these, 3 companies namely Foxcon Hon Hai, Wistron and Pegatron are contract manufacturers for Apple iPhones. Apple (37%) and Samsung (22%) together account for nearly 60% of global sales revenue of mobile phones and this scheme is expected to increase their manufacturing base manifold in the country.

Under Mobile Phone (Domestic Companies) Segment, Indian companies including Lava, Dixon Technologies, Bhagwati (Micromax), Padget Electronics, Sojo Manufacturing Services and Optiemus Electronics have applied under the scheme. These companies are expected to expand their manufacturing operations in a significant manner and grow into national champion companies in mobile phone production. 10 companies have filed applications under the Specified Electronic Components Segment which include AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, Vitesco and Neolync.

 Over the next 5 years, the Scheme is expected to lead to total production of about INR 11,50,000 crore (INR 11.5 lakh crore). Out of the total production, companies under Mobile Phone (Invoice Value INR 15,000 and above) segment have proposed a production of over INR 9,00,000 crore, The companies under Mobile Phone (Domestic Companies) segment have proposed a production of about INR 2,00,000 crore and those under Specified Electronic Componentssegment have proposed a production of over INR 45,000 crore.

The scheme is expected to promote exports significantly. Out of the total production of INR 11,50,000 crore in the next 5 years, more than 60% will be contributed by exports of the order of INR 7,00,000 crore.The scheme will bring additional investment in electronics manufacturing to the tune of INR 11,000 crore.

The scheme will generate approximately 3 lakh direct employment opportunities in next 5 years along with creation of additional indirect employment of nearly 3 times the direct employment. Domestic Value Addition is expected to grow from the current 15-20% to 35-40% in case of Mobile Phones and 45-50% for electronic components.

With the demand for electronics in India expected to grow manifold by 2025,  PLI scheme and other initiatives to promote electronics manufacturing will help in making India a competitive destination for electronics manufacturing. Creation of domestic champion companies in electronics manufacturing under the Scheme will give fillip to vocal for local while aiming for global scale.

National Policy on Electronics 2019envisions positioning India as a global hub for Electronics System Design and Manufacturing (ESDM) by focusing on size and scale, promoting exports and enhancing domestic value addition by creating an enabling environment for the industry to compete globally. A

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