Foxconn & Dixon Urge Govt To Clear Pending Subsidies

Electronics manufacturers Foxconn and Dixon Technologies have reportedly urged Indian authorities to clear their pending dues to the tune of INR 700 Cr. 

The payments pertain to the subsidies that the two Apple vendors are liable to avail under the Centre’s production-linked-initiative (PLI) scheme. As per Bloomberg, Foxconn could receive as much as INR 600 Cr while homegrown Dixon could get INR 100 Cr if the government releases the funds. 

Sources reportedly said that authorities are currently reviewing the two requests. 

While the Centre has allocated north of INR 41,000 Cr under the smartphone PLI scheme, a part of the subsidies have not been doled out yet as some companies failed to meet production targets. However, sources reportedly added that both Foxconn and Dixon have argued that they are eligible for some of the unallocated funds. 

As per the report, Foxconn produced iPhones worth INR 30,000 Cr in the fiscal year 2022-23 (FY23), well above its government-mandated threshold of INR 20,000 Cr. Meanwhile, homegrown Dixon managed to produce smartphones worth INR 8,000 Cr in FY24 against the set target of INR 6,000 Cr. 

The INR 41,000 Cr PLI scheme envisages subsidies for electronics manufacturers if they cross certain annual value-based thresholds. The initiative also allocates unused subsidies, on account of applicants not meeting their targets, to the eligible applicants that exceeded their set output. 

However, Dixon’s case appears to be complicated. Sources reportedly said that the Centre is reviewing whether the homegrown electronics manufacturer made new investments for producing Xiaomi smartphones or whether “machines were merely shifted out of another factory” which previously assembled the Chinese brand’s devices.

This comes at a time when more and more global manufacturing giants are making a beeline for India to capitalise on the sops and incentives offered by the Indian government under various PLI schemes. While Apple assembled $14 Bn worth of iPhones in the country in FY24, Samsung also aggressively scaled up its manufacturing in India.