(MENAFN- KNN India) New Delhi, Mar 4 (KNN) In a bid to bolster smartphone manufacturing in India, the government's production-linked incentive (PLI) scheme has earmarked over Rs 4,400 crore in incentives for key players in the industry.
Apple Inc.'s three contract manufacturers - Foxconn, Wistron (now owned by Tata group), and Pegatron - along with Samsung and Dixon Technologies, are set to benefit from this initiative.
However, despite the substantial incentives on offer, not all companies have been able to meet the production targets outlined in the scheme, officials told ET.
This has led to a shortfall in the originally planned outlay of Rs 6,504 crore for the fiscal year 2024.
Among the companies facing challenges in meeting targets are Rising Star (Bharat FIH), a manufacturer for Xiaomi, and Indian companies like Lava and Optiemus Electronics.
While global firms like Samsung have managed to meet targets and claim incentives, others have struggled to do so.
As a result, there will be a redistribution of unclaimed incentives, allowing overachieving companies to benefit further from the scheme.
Despite these hurdles, the PLI scheme has significantly impacted the industry, with mobile phone exports reaching USD 10.5 billion from April to December 2023.
Previously ranked ninth, the electronics sector now stands fifth in terms of export categories, showcasing the scheme's effectiveness in promoting local manufacturing and exports.
Under the PLI scheme, companies receive graded incentives based on incremental sales, with the overall financial outlay reduced to Rs 38,601 crore over five years.
To qualify for benefits, companies must invest a minimum of Rs 250 crore in the first year of the scheme and a similar amount in each of the next three years.
Additionally, global companies need to manufacture incremental goods worth Rs 4,000 crore, Rs 8,000 crore, Rs 15,000 crore, Rs 25,000 crore, and Rs 50,000 crore in the final year of the scheme.
While the scheme has been amended to accommodate challenges faced by beneficiaries, there are still concerns regarding meeting targets and ensuring sustained growth in the industry.
With the scheme set to end in FY26 for most firms, there is a need for continued support and innovation to capitalise on India's potential as a manufacturing hub for smartphones.
(KNN Bureau)
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