Apple’s vendors, Samsung to boost India’s phone manufacturing scheme, says Govt

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Twenty-two mobile phone companies and electronic components manufacturers have applied for large-scale electronics manufacturing rights in India under 11 lakh-crore scheme over the next five years, announced by the government today.

Among these companies, iPhone maker Apple’s contract manufacturers as well as Samsung, Lava, Dixon and so forth, have lined up with proposals, Union Telecom and IT Minister Ravi Shankar Prasad.

Prasad said these proposals under the government’s 41,000-crore production-linked incentive (PLI) scheme for mobile phone manufacturing are expected to create around 12 lakh jobs, 3 lakh direct and 9 lakh indirect employment opportunities, in the country.

Here are the highlights from the press conference held earlier today where Prasad announced the PLI scheme:

  • A total of 22 companies have filed their application under the PLI Scheme.
  • “The benchmark for international companies was that they make mobile phones priced at or above 15,000,” Prasad said. These include Samsung, Foxcon Hon Hai, Rising Star, Wistron and Pegatron. There is no price limit for Indian companies under the scheme.
  • 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, the IT minister said.
  • “There will be huge (mobile phone) production of around 11 lakh crore, huge export of around 7 lakh crore and great employment opportunity for 3 lakh direct and 9 lakh indirect people. I personally thank all the companies that have applied,” Prasad told reporters.
  • Prasad also said that Indian companies, including Lava, Dixon Technologies, Bhagwati (Micromax), Padget Electronics, Sojo Manufacturing Services and Optiemus Electronics, have applied under the scheme and 10 companies have filed applications under the Specified Electronic Components Segment.
  • He added that the government also expects the new incentive scheme to help increase domestic value addition for mobile phones to 35-40% by 2025 from the current level of 20-25%.
  • The companies that have applied for components production of around 45,000 crore include AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, Vitesco and Neolync.
  • There were no applications from Chinese companies under the scheme as of now. The minister said India is not averse to investment from any country but companies will have to follow rules related to security clearance, etc.
  • The scheme is expected to promote exports significantly, the IT minister added. Out of the total production of 11,50,000 crore in the next 5 years, more than 60% will be contributed by exports of the order of 7,00,000 crore, he said.
  • The scheme will extend cash incentives of 4-6% for five years on incremental sales of goods manufactured in India with 2019-2020 as the base year, he added.

With the demand for electronics in India expected to grow manifold by 2025, the IT Minister expressed confidence that PLI scheme and other initiatives to promote electronics manufacturing will help in making India a competitive destination for electronics manufacturing and give boost to AtmaNirbhar Bharat.

With inputs from agencies

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