Govt selects 16 mobile phone and component manufacturers under PLI scheme
07 October 2020
Ministry of Electronics and Information and Technology (MeitY) has approved 16 eligible applicants under the Production-Linked Incentive (PLI) scheme for large scale electronics manufacturing. The scheme, notified on 1 April 2020, extends an incentive of 4 per cent to 6 per cent 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 commencing base year FY2019-20.
While giving approval of eligible applicants under the PLI Scheme, union minister for electronics and IT, communications, law and justice Ravi Shankar Prasad said the PLI scheme has been huge success in terms of interest received from global as well as domestic mobile phone manufacturing companies and electronic components manufacturers.
While industry has reposed its faith in India’s as a world class manufacturing destination, which is in line with Prime Minister’s call of AtmaNirbhar Bharat - a self-reliant India, the minister said “we are optimistic and looking forward to building a strong ecosystem across the value chain and integrating with the global value chains, thereby strengthening electronics manufacturing ecosystem in the country”.
The international mobile phone manufacturing companies that are approved under Mobile Phone (Invoice Value Rs15,000 and above) segment are Samsung, Foxconn Hon Hai, Rising Star, Wistron and Pegatron. Out of these, three companies, namely Foxconn Hon Hai, Wistron and Pegatron, are contract manufacturers for Apple iPhone. Apple (37 per cent) and Samsung (22 per cent) together account for nearly 60 per cent 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, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics, are approved by MeitY. These companies are expected to expand their manufacturing operations in a significant manner and grow into national champion companies in mobile phone production.
Six companies are approved under the Specified Electronic Components Segment, which include AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, and Neolync.
Over the next five years, the approved companies under the PLI Scheme are expected to lead to total production of more than Rs10,50,000 crore. Out of the total production, the approved companies under Mobile Phone (Invoice Value Rs15,000 and above) segment have proposed a production of over Rs9,00,000 crore. The approved companies under Mobile Phone (Domestic Companies) segment have proposed a production of about Rs1,25,000 crore and those under Specified Electronic Components segment have proposed a production of over Rs15,000 crore.
The companies approved under the scheme are expected to promote exports significantly. Out of the total production of Rs10,50,000 crore in the next five years, around 60 per cent will from exports worth Rs6,50,000 crore.
The companies approved under the scheme will bring additional investment in electronics manufacturing to the tune of Rs11,000 crore. These investments will together help generate more than 2 lakh direct employment opportunities in the next five years along with creation of additional indirect employment of nearly three times the direct employment.
Domestic value addition is expected to grow from the current 15-20 per cent to 35-40 per cent in case of mobile phones and 45-50 percent for electronic components.
With the demand for electronics in India expected to grow manifold by 2025, the minister expressed confidence that PLI scheme and other initiatives will promote electronics manufacturing and help in making India a competitive destination for electronics manufacturing and give boost to AtmaNirbhar Bharat.
The National Policy on Electronics 2019 envisions 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.