Electronics manufacturing: 22 companies file under PLI scheme

Our Bureau New Delhi | Updated on August 01, 2020 Published on August 01, 2020

Ravi Shankar Prasad

Any country welcome, but need to comply India’s norms: Ravi Shankar Prasad

The government on Saturday said a total of 22 companies have filed their application under the Production Linked Incentive Scheme (PLI scheme).

With this, production worth ₹11.50 lakh crore and exports valuing ₹7 lakh crore are expected over next five years, Ravi Shankar Prasad, Minister of Electronics and Information Technology said.

The international mobile phone manufacturing companies that have applied under Mobile Phone (Invoice Value ₹15,000 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 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.

PLI scheme

The PLI scheme for large scale electronics manufacturing was notified on April 01 and it was open for filing applications till July 31 (Friday). The incentives are applicable under the scheme from August 01 (Saturday).

PLI scheme extends an incentive of four per cent to six 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).

"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," Prasad said.

As per an earlier announcement, the government will allow five global champions and five domestic manufacturers in mobile phones manufacturing to start first under this scheme, names of which will be announced in the coming dates, he said.

He said PLI scheme 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 destination and this resonates strongly with Prime Minister’s clarion call of AtmaNirbhar Bharat - a self-reliant India, the Minister said.

Out of the total production, companies under Mobile Phone (Invoice Value ₹15,000 and above) segment have proposed a production of over ₹9-lakh crore, the companies under Mobile Phone (Domestic Companies) segment have proposed a production of about ₹2-lakh crore and those under Specified Electronic Components segment have proposed a production of over ₹45,000 crore.

The scheme will bring additional investment in electronics manufacturing to the tune of ₹11,000 crore.

Domestic manufacturers

Under Mobile Phone (Domestic Companies) Segment, Indian companies including Lava, Dixon Technologies, Bhagwati (Micromax), Padget Electronics, Sojo Manufacturing Services and Optiemus Electronics have applied, the government informed.

These companies are expected to expand their manufacturing operations in a significant manner and grow into national champion companies in mobile phone production.

Ten companies have filed applications under the Specified Electronic Components Segment which include AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, Vitesco and Neolync.

“The scheme will generate around three lakh direct employment opportunities in next five years along with creation of additional indirect employment of nearly three times the direct employment,” Prasad said.

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 per cent for electronic components, he further said.

With the demand for electronics in India expected to grow manifold by 2025, the PLI scheme and other initiatives will help in making India a competitive destination for electronics manufacturing, he said.

When asked about Chinese companies participating or any restrictions on them, Prasad said, "As an IT Minister I am not supposed to comment upon the individual business decision from any country...there are norms by the government of India and we are very clear on them and those norms have to be complied."

Having said that he also added, "Those who have applied, they are welcome, but I am not naming any country. But, there are some norms, for investments also in this country, with security norms and they have to comply with that."

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Published on August 01, 2020
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