PLI Scheme to herald a new era in mobile phone and electronic components manufacturing

Oct 06: Ministry of Electronics and Information and Technology (MeitY) has approved 16 eligible applicants under the PLI Scheme. Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing notified on 1st April, 2020, 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).

While giving approval of eligible applicants under the PLI Scheme, Shri Ravi Shankar Prasad, Union Minister for Electronics & IT, Communications, Law and Justice said that 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. 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. Minister further said that “we are optimistic and looking forward to building a strong ecosystem across the value chain and integrating with the global value chains, thereby strengthening the electronics manufacturing ecosystem in the country”.

The international mobile phone manufacturing companies that are approved under Mobile Phone (Invoice Value INR 15,000 and above) Segment are Samsung, Foxconn Hon Hai, Rising Star, Wistron, and Pegatron. Out of these, 3 companies namely Foxconn 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.

Under Mobile Phone (Domestic Companies) Segment, Indian companies including lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs, and Optiemus Electronics are 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.

6 companies are approved under the Specified Electronic Components Segment which includes AT&S, Ascent Circuits, Vision, Walsin, Sahasra, and Neolync.

Over the next 5 years, the approved companies under the PLI Scheme are expected to lead to total production of more than INR 10,50,000 crore (INR 10.5 lakh crore). Out of the total production, the approved companies under Mobile Phone (Invoice Value INR 15,000 and above) segment have proposed a production of over INR 9,00,000 croreThe approved companies under Mobile Phone (Domestic Companies) segment have proposed a production of about INR 1,25,000 crore and those under Specified Electronic Components segment have proposed a production of over INR 15,000 crore.

The companies approved under the scheme are expected to promote exports significantly. Out of the total production of INR 10,50,000 crore in the next 5 years, around 60% will be contributed by exports of the order of INR 6,50,000 crore.

The companies approved under the scheme will bring additional investment in electronics manufacturing to the tune of INR 11,000 crore.

The companies approved under the scheme will generate more than2 lakh direct employment opportunities in the next 5 years along with the 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 the case of Mobile Phones and 45-50% for electronic components.

With the demand for electronics in India expected to grow manifold by 2025, Hon’ble Minister expressed confidence that the PLI scheme and other initiatives to promote electronics manufacturing will help in making India a competitive destination for electronics manufacturing and give boost to AtmaNirbhar Bharat.

The creation of domestic champion companies in electronics manufacturing under the Scheme will give fillip to vocal for local while aiming for a global scale.

Under the leadership of Prime Minister Shri Narendra Modi and his visionary initiatives like the “Digital India” and “Make in India” programs, India has witnessed an unprecedented growth in electronics manufacturing in the last five years. The National Policy on Electronics 2019 envisions positioning India as a global hub for Electronics System Design and Manufacturing (ESDM) by focusing on size and scale, promoting exports, and enhancing domestic value addition by creating an enabling environment for the industry to compete globally.