The Production Linked Incentive Scheme by the Central government is an incentive scheme initiated to encourage the manufacturing of electronics in India and turning the country into a global manufacturing hub of electronic products.
The scheme was launched under National Policy on Electronics 2019 to position India as the next international nerve centre for Electronics System Design and Manufacturing solutions. The scheme was introduced on April 1 this year and welcomed applications from phone companies to be included under the promotional initiative and benefits of the scheme.
The application period started on June 3 and ended on July 31. Now, the Government of India has released the names of the 16 companies that have been enlisted under the PLI scheme.
Under the scheme, the companies enlisted will be getting 4-6 percent for manufacturing micro components of electronic devices such as diodes, thiodes, transistors, and other components of mobiles. Producers of smartphones worth Rs 15,000 or more will be eligible for an incentive of 6 percent upon the sale of a smartphone manufactured in India. Indian producers of smartphones in the same segment will be earning an incentive of 200 crores on the sale of smartphones manufactured domestically.
The international smartphone brands that had earlier applied to be listed under the scheme are Foxtron, Pegatron, Samsung, and Rising Star. The domestic smartphone manufacturers that have been considered under the PLI scheme are Micromax, Lava, Dixon Technologies, and Optiemus Electronics.
Over the next four years, the PLI scheme is expected to garner a profit of Rs 11.5 trillion and create three lakh direct jobs.
Samsung is one of the oldest smartphone brands to set up its manufacturing unit in India which is one of the largest global manufacturing units of smartphones.
Samsung has decided to double the production of smartphone units in its Noida factory and when that goal is achieved, the Noida branch of the smartphone producer will be the biggest global manufacturing unit of smartphones.
The inclusion of Samsung under the PLI scheme is going to aid this goal of Samsung and will help in increasing the sale of Samsung smartphones. The company which is known for its over-Rs 15000 smartphones is going to reap huge profits from the PLI scheme.
Foxconn as a contract manufacturer of smartphones had first started its production in India in 2006. First, it was manufacturing handsets for the dependable brand Nokia. In later years, it manufactured phones for the Chinese brand Xiaomi. The company has partnered with Infocus, Motorola, and Lenovo at different points in time. Its most recent manufacturing collaboration is with Apple.
Apple Inc is also one of the 16 companies that have secured approval from the Government of India under the PLI scheme. With the benefits of PLI and the inclusion of Foxconn technology under the initial beneficiaries, Apple is set to manufacture 60% of its smartphones in India.
On the domestic front, Lava and Dixon are the leading producers of smartphones and consumer durables such as mobile phones, TVs, and washing machines. While Lava has India’s first mobile devices design centre to support innovation and development of smartphones indigenously, Dixon has 10 manufacturing units in India. Micromax, the Indian smartphone company that was once a leading smartphone producer, has been facing decline since 2016. After being enlisted under the PLI scheme, the production units of Micromax are going to get a new lease of life.
The ministry of electronics and information technology is optimistic that the PLI scheme will be able to put India on the global manufacturing map and make India a global supplier of newly developed smartphones and electronics.
The response to the PLI scheme has been overwhelming with the world’s largest brands of electronics signing up for it. The successful implementation of PLI in the market is a crucial turn for the Indian market and manufacturing scene.
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