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Global mobile manufacturers — Samsung, Foxconn and Wistron — have met the sales targets set under the production linked incentive (PLI) scheme for FY22. This comes after most of the selected firms under the scheme were unable to meet sales targets in the first year, prompting the government to increase the tenure of the scheme from five to six years.
“Of the global manufacturers, Samsung, Foxconn and Wistron have achieved their incremental sales targets; Pegatron will start manufacturing in the coming fiscal year, so it is currently out of the mix,” Pankaj Mohindroo, chairman of the Indian Cellular and Electronics Association, told BusinessLine.
Industry sources suggest Rising Star will also be unable to meet its incremental sales targets. Foxconn, Wistron and Pegatron are contract manufacturers of Apple in India while Rising Star manufactures phones for Xiaomi.
BusinessLine reached out with a query to Samsung and Wistron, both of whom did not comment. It remains unknown whether indigenous players such as Lava, Micromax, Dixon, Karbonn etc have met their sales targets for FY22.
The scheme
The PLI scheme for mobile manufacturing was introduced in 2020, in order to boost India’s mobile manufacturing capabilities and encourage export-oriented production. Since its introduction, the PLI concept has been extended to 13 sectors.
ICEA estimates that mobile exports have crossed ₹43,500 crore as a result of mobile PLI. Critics contend, however, that the overall value addition still needs to be improved in order to make India truly a mobile manufacturing hub.
In order to claim incentives, global companies need to achieve a minimum incremental sale of ₹4,000 crore for the first year, ₹8,000 crore for the second year, ₹15,000 crore for the third year, ₹20,000 crore in the fourth year and ₹25,000 crore for the fifth year.
FY21 targets
Samsung was the sole mobile manufacturer selected to have achieved its PLI sales target for the previous fiscal year. Owing to pandemic-related supply chain disruptions, most of the selected mobile manufacturers had missed their 2021 sales targets. Primary reasons for the same had been the chip shortages; factories remaining non-operational for longer than expected; and the delay in components reaching factories owing to India-China tensions.
With the easing of supply chain issues in 2022, more mobile manufacturers are likely to be able to avail their PLI benefits for this fiscal.
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