According to sources, global players that are likely to apply for the scheme include Foxconn, Wistron
(both of which manufacture mobile devices for Apple), South Korean major Samsung, and US’s electronic manufacturing services giant Flextronics. Lava
International and Micromax
are among the home-grown players.
E-mail queries sent to Foxconn, Wistron, and Micromax
did not elicit any response. Flextronics declined to comment at the moment.
It is not clear yet whether Chinese players like Xioami, Vivo or Oppo will also join the game. Xioami India Chief Operating Officer Muralikrishnan B, while welcoming the scheme, did not respond to the specific query whether the company would apply though its vendors. Vivo and Oppo declined to comment.
Under the scheme, global companies will get incentives ranging from 4 to 6 per cent based on production for a period of five years. However, they will have to meet three conditions — they will have to export only those phones which have a production value of $200 each, will have to invest Rs 1,000 crore staggered across this period, and export a minimum of Rs 4,000 crore in the first year, going up to Rs 25,000 in the fifth year.
For home-grown companies, no minimum production value of a phone has been fixed. But they have to make an incremental investment of Rs 200 crore in five years and export an incremental amount of Rs 100 crore in the first year, going up to Rs 600 crore in the fifth year.
Confirming that it would apply for the scheme, Hari Om Rai, chairman of Lava
International, said, “We are planning to increase our assembly line by 25 per cent and that of PCBA making by 125 per cent. In the next six months, we will shift our mobile exports capacity from China to India to increase our mobile making capacity from 2 million to 5 million a month by investing Rs 100 crore.”
Rai said the firm would concentrate on exporting mobile phones below $200 and undertake contract manufacturing for other global device players.
According to sources, Apple is in talks with both its partners to use them for manufacturing phones for exports. Foxconn, for instance, has two entities in India, one of which exclusively undertakes manufacturing for Apple (Hon Hai Precision, which makes for Apple and Rising Stars, which makes for others). Then there is Wistron.
The game plan of Apple, say sources, is to export over Rs 60,000 crore worth of phones by the fifth year. That would, according to analysts, constitute around 7 per cent of Apple’s production value from China in the first year of the PLI scheme, going up to 18 per cent in the fourth year.
could make applications through both the companies (the other company manufactures for other global players). South Korean giant Samsung
is also expected to apply for the scheme, though a company spokesperson did not comment on a query.
The company has already made an investment of Rs 5,000 crore in a 120-million per annum mobile plant and is looking to export 30 per cent of its capacity. However, one key issue is that as the investment has already been made, it will not be considered for PLI.
As a result, the company has to fork out an additional Rs 1,000 crore to get the benefit. However, talks are on with the government to resolve this issue.
The PLI scheme, if it takes off, could help India grab about 7 per cent share of the $369 billion global export market by 2025.