The Ministry of Electronics and Information Technology (MeitY), on Tuesday (October 16), approved 16 applicants under the PLI (Production Linked Incentive) scheme for large scale electronics manufacturing in the country.
Of the 16 approved applicants, 10 have been approved under the Mobile Phones segment. The international mobile phone manufacturing companies approved under the scheme include Samsung, Foxconn Hon Hai, Rising Star, Wistron and Pegatron. Among these, Foxconn Hon Hai, Wistron and Pegatron are contract manufacturers for global tech giant Apple, which is looking to manufacture the iPhone 12 Series in India.
The PIB (Press Information Bureau) press release states that Apple (37% and Samsung (22%) together comprise nearly 60% of global sales revenue for mobile phones, and that the PLI scheme would help increase the manufacturing base for these two companies in India.
The PLI scheme, notified in April 2020 by the government to lure international companies for setting up manufacturing facilities in India, extends an incentive of 4% to 6% on incremental sales (over the base year) of goods under target segments which are manufactured in India. Eligible companies who are approved for the scheme will receive the incentive for a period of 5 years subsequent to the base year (FY20).
The domestic electronics companies who have been approved under the Mobile Phone segment include Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics.
Six companies are approved under the Specified Electronic Components segment, namely AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, and Neolync.
“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,” said Minister of Electronics and Information Technology Ravi Shankar Prasad.
The PIB press release claims that the next five years would see the approved applicants lead production worth INR 10.5 lakh crores, of which, 9 lakh crores would come from the handset makers alone. It has been further claimed that 60% of the total production would contribute to exports.
It is claimed that the companies approved under the scheme would bring in additional investments to the tune of INR 11,000 Cr and generate more than 2 lakh jobs.
‘Made in India’ iPhone 12 Series
In August, Inc42 reported that the US-based tech giant Apple was looking to manufacture the upcoming and highly awaited iPhone 12 Series in India. These ‘Made in India’ iPhones are expected to available in the market by mid-2021.
Apple’s Taiwanese contract manufacturer Wistron will start manufacturing the new iPhones in its Narasapura plant near Bengaluru this year. Further, the company is also planning to hire 10,000 employees and invest INR 2,900 Cr in the new plant. The manufacturing facility is expected to be fully operational by October this year.
iPhone 12 is the latest of the company’s offerings to be manufactured in India. The company started manufacturing phones in India for the first time in 2017, with the iPhone SE at Bengaluru’s Wistron facility. It was later expanded to another of its contract manufacturers, Foxconn’s plant in Chennai. Last year in October, Apple started manufacturing the iPhone XR locally in India.
In the past, Apple has announced its intentions of investing $1 Bn in India to boost domestic manufacturing. With its contract manufacturer Foxconn, Apple plans to export ‘Made in India’ iPhones.
Foxconn’s factory in Chennai will be used as a manufacturing unit for Apple’s product. Apple’s other component suppliers will also be investing in the venture.
India An Alternative To China?
The local production of iPhones in India comes amid reports suggesting that the country is trying to position itself as an alternative to China for manufacturing needs of multinational companies. With increased global scrutiny over China’s role in failing to contain the spread of the Covid-19 coronavirus, the Indian government has been trying to lure global technology companies to set up bases in India, promising them various incentives if they choose to do so.
In June, IT minister Ravi Shankar Prasad announced the launch of $6 Bn plan to boost electronics manufacturing, saying it would start by offering five global smartphone makers incentives to establish or expand domestic production.
If reports are to be believed, the government’s promised incentives to electronics manufacturers have attracted investments worth over $1.5 Bn to set up mobile manufacturing units in India. The investments have come from companies such as South Korea-based Samsung Electronics Co. and Apple Inc, among various others.
However, according to a survey by financial services company Standard Chartered PLC, Vietnam remains the most favoured destination, followed by Cambodia, Myanmar, Bangladesh and Thailand, for global businesses to set up shop.