The Ministry of Electronics and Information Technology (MAIT), in an official release, said on Tuesday it approved plans of 16 companies, including Apple’s contract manufacturers Foxconn Hon Hai, Wistron and Pegatron, for starting work under the production linked incentive (PLI) scheme.
Apart from the three contract manufacturers of Apple, other global companies such as Samsung and Rising Star have also been given approval for making mobile phones in the INR 15,000 and above value segment.
Among the domestic players, companies such as Lava, Micromax’s parent company Bhagwati Products, Padget Electronics, UTL Neolyncs, and Optiemus Electronics were granted approval by the IT Ministry, the release said.
“New strategy of export-led growth will help create expansion of manufacturing in India and will help to achieve scale. This will also help in expanding the value chain of components etc. Further, this will also enable Indian manufacturers of both finished products and components to participate in global value chains,” MAIT President Nitin Kunkolienker said.
“The policy was a result of MAIT’s continuous focus and strenuous efforts put forth along with the government. We thank the Indian government for such an incentive launch and appreciate the great effort towards making a manufacturing destination. The PLI scheme will play a vital role in increasing employment generation and contribute directly to the country’s economic growth. We congratulate the manufacturers and brands on getting the approval for the scheme,” he added.
The PLI Scheme
According to MEIT, the domestic electronics hardware manufacturing sector faces a lack of level playing field vis-à-vis competing nations. The numbers suggest that the sector suffers disability of around 8.5% to 11% because of inadequate infrastructure, domestic supply chain and logistics; high cost of finance; inadequate availability of quality power; limited design capabilities and focus on R&D by the industry; and inadequacies in skill development.
The PLI scheme offers a production linked incentive to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units. The Scheme aims to boost the electronics manufacturing landscape and establish India at the global level in electronics sector in accordance with the vision of the National Policy on Electronics 2019 (NPE 2019).
It aims to position India as a global hub for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components and creating an enabling environment for the industry to compete globally.
The scheme shall extend an incentive of 4% to 6% on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies, for a period of five (5) years subsequent to the base year as defined.
MAIT is India’s APEX electronics industry association representing the IT, mobile, datacom, consumer electronics, white goods, industrial electronics, and services subsectors of the electronics industry. MAIT is recognized by both the government as well as the industry for its role in the growth and development of the Electronics industry.