India might become the next manufacturing hub of smartphones and electronics in the coming few years. The government of India has approved the applications of 16 electronics manufacturers under its Production-Linked Incentive (PLI) scheme, which aims to incentivise companies manufacturing in India a recent report has said. There are 10 mobile phone companies among the 16 electronics manufacturers that have been approved to avail the scheme, including Samsung Mobile, and Apple’s suppliers Foxconn, Wistron, and Pegatron. Domestic manufacturers approved by the government are Lava, Micromax (Bhagwati), Padget Electronics, UTL Neolyncs, and Optiemus Electronics.
The companies approved under the scheme are likely to promote exports. Out of a total production of items worth Rs. 10.5 lakh crores in the next five years, around 60 percent will contribute towards exports, the report said. Samsung has, according to sources committed to manufacturing Rs. 2.2 trillion worth of mobile devices worth Rs. 15,000 and above, since price is one of the key eligibility criteria for availing the government’s PLI scheme. Apple and Samsung together contribute to 60 percent of the global smartphone sales, and the PLI scheme will help increase their manufacturing in India.
Indian companies that have been approved have proposed a production output worth Rs. 1.25 lakh crores in the next five years, the Ministry of Electronics and Information Technology was quoted as saying in a statement.
Apart from the companies mentioned above, the government has also given its nod of approval to companies like AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, and Neolync under the Specified Electronics Components Scheme.
The companies under PLI will also generate close to 2 lakh employment opportunities over the next five years, along with additional indirect employment, which is said to be three times more than the direct employment opportunities.
With this move, the domestic value addition is expected to grow from 15-20 percent to 35-40 percent in case of mobile phones and to 45-40 percent for other electronic components.
Union Minister for Electronics and Information Technology Ravi Shankar Prasad said that the PLI scheme will help make India a competitive destination for electronics manufacturing, putting us at par with the likes of Vietnam and China, which control 85 percent of the global export market.
It is worth mentioning that the PLI scheme of the Government of India provides a good option to manufacturers who are considering diversifying their supply chains away from China due to the rising global pressure on the Nation State.
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