The latest Production-linked Incentive (PLI) scheme for smartphones and other technology-driven sectors introduced by the government has seen an overwhelmingly positive response. Government initiative led to leading international companies increasing production at their respective units in India.
PLI, which was introduced by the Indian Government in 2020, has been a boon to the Indian manufacturing industry. It was to be implemented across 10 key sectors with the aim of making Indian manufacturers globally competitive while attracting investments.
The huge inflow of interest from global manufacturers has done wonders for the government’s confidence in the scheme. It has also planned to introduce PLI to boost domestic production of smart, wearable devices.
PLI schemes will enable Indian electronic and IT exports to reach the Rs. 2.45 trillion mark. The schemes would also increase manufacturing’s share in the Indian GDP to 25% in the near future, a huge jump from the current 17-18%.
The government is also reforming rules and regulations to ensure that the manufactured goods would stand up to the Asian standards. The move has been highly appreciated by global companies who are in a race to keep up with both Indian as well as export demands.
Girija Pande, Chairman of Apex Avalon Consultancy, said, “While the government’s intention is to bring the five largest companies of the world manufacturing laptops or tablets to India, supported by PLI offer, Apple Inc and Samsung are already expanding production of mobile phones from their Indian plants.”
Apple is looking to lessen its dependence on Chinese manufacturers and has accordingly ramped up its iPhone production levels in India through its global contractors.
“Reflecting confidence in the Indian market, Apple has ramped up manufacturing of iPhones in India via the local units of Taiwan’s Foxconn Technology Group and Wistron Group.” Pande said.
A third contractor, Pegatron Corp, has declared its intention to invest up to USD 1 billion for the expansion of its iPhone assembly plant in South India.
The total investments from these three Apple suppliers come up to roughly USD 900 million over the next five years.
Domestic manufacturers like Dixon Technologies, Lava International, Optiemus Electronics and Micromax as well as Korean giant, Samsung, are all working on expansion plans to benefit from the PLI scheme.
Pande also added, “The government currently has no intention to stop with incentives for attracting imports of value-added items that can be re-assembled or incorporated into Indian origin products and re-exported.” If the current trend continues, 2021 will really turn out to be a golden year for the Indian manufacturing sector.