Sources privy to discussions between global device manufacturers and the government say these companies could generate exports of more than Rs 2 trillion annually, thanks to the production-linked incentive scheme (PLI), which offers support for manufacturers to make India a global hub. The budgetary allocation for the scheme is over Rs 40,000 crore.
India’s share in the export market is 0.5 per cent, at $2 billion.
constitute 85 per cent of the market. Three firms — Apple, Samsung, and Huawei — account for 75 per cent of global exports. The government has a target of achieving mobile device exports of $110 billion by 2025.
Global players in India, those in the know estimate, could contribute a fourth of this.
Sources say Apple Inc
could shift over 7 per cent of its production value from China
in the first year of the PLI scheme and that can go up to 18 per cent in the fourth year. An Apple Inc
spokesperson did not respond to an email.
Under the PLI scheme, global players can export phones that have a production value of $200. That is 33 per cent of all mobile devices sold in the country. Also it has to make a graded investment of Rs 1,000 crore.
Companies get a graded incentive from the government. It starts with 6 per cent of the production value for the first two years and goes down to 4 per cent in the fifth or final year. The incentive is available each year if a company achieves its target of incremental minimum exports, which differ from year to year. But it also imposes a cap on sales, above which no incentives are provided (see chart).
The scheme is structured to accommodate five global players if they meet the conditions.
According to sources privy to discussions, Apple Inc’s production value of exports of iPhones in China is $60-62 billion per annum. And how much Apple can shift from China is predicated on the estimate that its production value of iPhones there would remain the same as now.
The company currently has two vendors — Foxconn and Wistron — making their phones in the country but exports are less than $500 million.
Samsung, on the other hand, has shifted out of China and made large bets on Vietnam.
The company, however, has set up a mobile plant in India with an investment of Rs 5,000 crore and hopes it could use 30 per cent of its 120-million phone capacity for exports.