India Emerging as Big Manufacturing Centre - Government Panel Approves $100-billion Mobile Export Proposals

The applications by iPhone contract makers Foxconn, Pegatron and Wistron, along with Samsung, Karbonn, Lava and Dixon, to export mobile phones worth around $100 billion from India have been cleared by the empowered group, mentioned people with knowledge of the matter. “The empowered committee has approved all applications estimated to export around $100 billion (Rs 7.3 lakh crore) worth mobile phones under the production linked incentive scheme (PLI) and all the applications will be placed before the cabinet probably this week,” stated a senior government official.

Members of the empowered committee include the Niti Aayog CEO along with the secretaries of economic affairs, expenditure, revenue, the Ministry of Electronics and Information Technology (MeitY), Department for Promotion of Industry and Internal Trade (DPIIT) and Directorate General of Foreign Trade (DGFT). Five of the applicants are overseas ones, seven are Indian and another six are in the components manufacturing scheme. Apple’s contract producers and Samsung have submitted manufacturing estimates of telephones value $50 billion every within the subsequent 5 years, in accordance with the functions, mentioned folks with information of the matter. Exports will probably be barely decrease in every case.

“The extraordinary response to the PLI shows enormous trust of the global community in India’s manufacturing capability and leadership of Prime Minister Narendra Modi,” stated Ravi Shankar Prasad, Communications & IT Minister. The PLI scheme, which aims to make India a manufacturing hub for smartphones, was notified in April. Apple’s contract manufacturers started producing its latest handset models, the iPhone 11 and iPhone SE, shortly after that in India. The scheme is aimed at attracting manufacturers looking to move out of China amid Sino-US trade tensions, and even looks to draw companies from manufacturing hubs such as Vietnam. While Foxconn and Wistron already have plants running in India, Pegatron - Apple’s second-largest contract manufacturer is looking to set up its factory and is talking to states such as Uttar Pradesh, Tamil Nadu, Karnataka and Andhra Pradesh. Meanwhile, Samsung, which now exports phones worth about $2.5 billion from India, is all set to ramp up its production to handsets worth $50 billion in the next five years. Of this, $40 billion will comprise devices with a factory price of more than $200. “Samsung exporting $2.5 billion out of India - of this, 97 percent was in the below $200 segment. By putting this floor price of $200 for eligibility in the PLI scheme, we have incentivized them to make high-value phones in the country and now they will be vacating this space of less than 15,000 factory price for Indian players to occupy,” says the first official. “This is an important stage as it will ensure that Indian players are able to climb up the learning curve and start making world-class smartphones to compete globally.”

The five global applicants are Samsung, two units of Foxconn, Wistron and Pegatron. The domestic ones are Lava, Dixon, Micromax, Padget Electronics, Sojo, Karbonn and Optiemus. According to government data, 22 companies had applied for the Rs 41,000-crore PLI scheme.

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