Big push: iPhone maker Pegatron, Samsung likely to have applied for govt's PLI scheme

NEW DELHI: Pegatron, Apple’s second-largest contract manufacturer, and Samsung were among 22 companies to have commited investments worth Rs11,000 crore while applying for the government’s production-linked incentive scheme that seeks to establish India as a smartphone export hub rivalling northeast Asia’s electronics powerhouses.

Apple’s other two global contract manufacturers, Foxconn and Wistron have also applied for the scheme, underlining the iPhone maker’s concerted attempts to shift production away from China amid Sino-US geopolitical tensions, with India being the beneficiary.

As per government statistics for applications to the Rs 41,000-crore PLI scheme, 22 companies have sought incentives. Out of these, five international players- Samsung, Foxconn – through two units, Wistron and Pegatron and five domestic players- Lava, Dixon, Micromax, Padget Electronics, Sojo and Optiemus will be aided by the government to develop their manufacturing ecosystem in India.

This will lead to production worth Rs. 11.50 lakh crore in five years of which 60% will be exported, creating some 3 lakh direct employment and three times indirect employment, the government said in a statement. Domestic value addition in mobile phones will increase from current 15-20% to 35-40%.

Besides Apple, Foxconn also makes mobile phones for market leader Xiaomi and HMD, maker of Nokia phones.

Other top Chinese players such as Oppo—which makes handsets for itself, Realme and OnePlus—and Vivo have not applied for the PLI scheme, industry executives said.

The Chinese companies, including Xiaomi, had been facing a backlash in India, owing to the Sino-India border tensions.

The handset companies didn’t respond to ET’s queries at the time of going to print.

Companies who have applied for the Electronics Manufacturing Clusters (EMC) scheme include Austria-based AT&S and China-based Avary (for printed circuit boards), US-based Visicon (for assembly, testing, marking, and packaging}, Taiwanese Walsin ( for passives), German company Vitesco (for power electronics sensors) and Israeli Neolync (for actives).

Among Indian companies are Ascent Circuits (PCB), Sahasra (Passives and ATMP), ASIP (ATMP), and SFO Technologies (PCB, Sensors and ATMP).

“This will lead to production of electronics components worth Rs. 45,000 Crore, which will supply components to medical electronics, automobile, telecom, industrial and other segments of electronics,” the release said.

Telecom minister RS Prasad is scheduled to hold a briefing on Saturday on the applications for the PLI scheme, which aims to incentivise large electronic manufacturers to set up production bases in the country for the local and global market.

The government had in June started inviting applications for three schemes—PLI, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme—offering a total of Rs 50,000 crore worth of incentives to attract global mobile device makers and boost local companies for electronics manufacturing.

The PLI scheme, under which Rs 40,951 crore can be given out as graded incentives to domestic and global companies in the next five years, accounts for the bulk of the offerings.

Under the scheme, to avail the graded incentives ranging between 4% and 6% over a five-year period, manufacturers will have to produce high-end phones (with freight on board value of more than $200) of more than Rs 4,000 crore over and above their production level in the country in the base year.

In the second, third, fourth and fifth years, manufacturers will have to produce phones worth Rs 8,000 crore, Rs 15,000 crore, Rs 20,000 crore and Rs 25,000 crore over the base year production value. If the manufacturers achieve that, it would significantly enhance annual exports of phone handsets from the existing $3 billion.

Big push: iPhone maker Pegatron, Samsung likely to have applied for govt's PLI scheme Big push: iPhone maker Pegatron, Samsung likely to have applied for govt's PLI scheme Reviewed by TechCO on 8/01/2020 Rating: 5

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