Policy

Centre approves 16 mobile phone companies under PLI Scheme

Our Bureau New Delhi | Updated on October 06, 2020 Published on October 06, 2020

Scheme extends an incentive of 4-6% on incremental sales of goods under target segments that are manufactured in India

The Ministry of Electronics and Information Technology (MeitY) on Tuesday said it has approved 16 eligible applicants under the Production-Linked Incentive (PLI) Scheme for large-scale electronics manufacturing that had been notified on April 1.

The scheme extends an incentive of 4-6 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 subsequent to the base year (FY2019-20).

“The PLI scheme has been a huge success in terms of the applications received from global as well as domestic mobile phone manufacturing companies and electronic components manufacturers. The industry has reposed its faith in India’s stellar progress as a world-class manufacturing destination,” said Ravi Shankar Prasad, Minister for Electronics & IT, Communications, Law and Justice.

He said the government is optimistic and looking forward to building a strong ecosystem across the value chain and integrating with global value chains, thereby strengthening electronics manufacturing ecosystem in the country.

The international mobile phone manufacturing companies that are approved under the mobile phone (invoice value ₹15,000 and above) segment are Samsung, Foxconn Hon Hai, Rising Star, Wistron and Pegatron.

Out of these, three companies — Foxconn Hon Hai, Wistron and Pegatron — are contract manufacturers for Apple iPhones. 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, a government release said.

Championing manufacturing

Under the mobile phone (domestic companies) segment, companies including Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics have been 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 have been approved under the specified electronic components segment — 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 worth more than ₹10,50,000 crore, and out of the total production, the approved companies under the mobile phone (invoice value ₹15,000 and above) segment have proposed a production of over ₹9,00,000 crore.

The approved companies under the mobile phone (domestic companies) segment have proposed a production of about ₹Rs.1,25,000 crore and those under the specified electronic components segment have proposed production of over ₹15,000 crore.

The companies approved under the scheme are expected to promote exports significantly. Out of the total production of ₹10,50,000 crore in the next five years, around 60 per cent will be contributed by exports of the order of ₹6,50,000 crore.

The companies approved under the scheme will bring additional investment in electronics manufacturing to the tune of ₹11,000 crore. The companies approved under the scheme will generate more than two lakh direct employment opportunities in the next five years along with creation of additional indirect employment of nearly three times the direct employment, the government said.

Domestic value addition is expected to grow from the current 15-20 per cent to 35-40 per cent in the case of mobile phones and 45-50 per cent for electronic components.

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Published on October 06, 2020
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