Samsung, Foxconn, Pegatron, Wistron Sign Up For Modi Govt’s PLI Scheme Aimed At Making India A Global Hub Of Electronics Manufacturing 

In a big boost to India’s ambition to emerge as global mobile manufacturing hub, over 22 companies including leading South Korean mobile device maker Samsung and Taiwanese electronic manufacturing firms Pegatron, Foxconn and Wistron - have submitted applications to the Ministry of Electronics and Information technology (MEITY) to participate in the production-linked incentive (PLI) scheme offered to global players. This was confirmed by the Union Minister for Electronics and Information Technology Ravi Shankar Prasad,at a press conference in Delhi today

On 2 June the Minister had released detailed guidelines about the three new initiatives of the government - Production-linked incentive (PLI), Scheme for promotion of manufacturing of electronic components and semiconductors (SPECS) and Modified electronics manufacturing clusters (EMC 2.0) -aimed at increasing electronics manufacturing rapidly by 2025 and create additional 1.5-2 million new jobs in the short term.

PLI schemes for Large Scale Electronics Manufacturing extends an incentive of 4% to 6% 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 scheme opened for application on June 3rd and deadline for submission was July 31st . Incentives are applicable under the scheme from 01.08.2020.

The global electronic manufacturing firms that have applied for the PLI scheme are Samsung, Foxcon Hon Hai, Rising Star, Wistron and Pegatron. Among them, 3 companies namely Foxcon Hon Hai, Wistron and Pegatron are contract manufacturers for Apple iPhones.

Apple (37%) and Samsung (22%) together account for nearly 60% of global sales revenue of mobile phones and this scheme is expected to increase their manufacturing base manifold in the country.

Indian companies who have applied for the scheme are Lava, Dixon Technologies, Bhagwati (Micromax), Padget Electronics, Sojo Manufacturing Services and Optiemus Electronics have applied under the scheme. These companies are expected to expand their manufacturing operations in a significant manner and grow into national champion companies in mobile phone production.

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

Over the next 5 years, the scheme is expected to lead to total production of about INR 111.5 lakh crore.

Out of the total production, companies under Mobile Phone (Invoice Value INR 15,000 and above) segment have proposed a production of over INR 9 lakh crore, The companies under Mobile Phone (Domestic Companies) segment have proposed a production of about INR 2,00,000 crore and those under Specified Electronic Components segment have proposed a production of over INR 45,000 crore.

Union Minister Ravi Shankar Prasad said that the scheme is expected to promote exports significantly. Out of the total production of INR 11,50,000 crore in the next 5 years, more than 60% will be contributed by exports of the order of INR 7 lakh crore. The scheme will bring additional investment in electronics manufacturing to the tune of INR 11,000 crore.

The Minister added that scheme will generate approximately 3 lakh direct employment opportunities in next 5 years along with creation of additional indirect employment of nearly 3 times the direct employment. Domestic Value Addition is expected to grow from the current 15-20% to 35-40% in case of Mobile Phones and 45-50% for electronic components.