Govt Will Give Rs 41,000 Cr Incentives To These 16 Mobile Companies; Jobs For 2 Lakh Indians
To boost electronics manufacturing in India, Govt has launched a production-linked incentive (PLI) scheme for electronic manufacturers.
Under this PLI scheme of Rs 41,000 crore, so far the Government of India has selected 16 international and domestic companies for making India the next electronic-manufacturing hub.
Which Electronic Companies Might Start Manufacturing In India?
Samsung and Apple’s suppliers Foxconn Hon Hai, Rising Star, Wistron, and Pegatron are amongst the international manufacturers that are approved for the scheme. These companies also manufacture smartphones for other brands.
Samsung already has a manufacturing facility in Noida that exports smartphones to other countries.
The approved Indian companies are Lava, Bhagwati (Micromax), Optiemus Electronics, Padget Electronic (a unit of Dixon), and UTL Neolyncs.
The other six companies that have made the cut for the ‘specified electronic components’ segment include AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, and Neolync.
The government said that it expects the local makers to expand their manufacturing operations “in a significant manner and grow into national champion companies” in mobile phone production.”
Benefits of Production Linked Incentive (PLI) Program for Electronic Companies And Indian Economy?
With US-China trade tensions rising and the ongoing COVID-19 pandemic, electronic companies looking to diversify supply chains.
At the same time, Prime Minister Narendra Modi’s Production Linked Incentive (PLI) makes electronic manufacturers eligible for an incentive of 4% to 6% of their incremental sales over the next 5 years. They might generate higher revenue from the domestic market as well as exports.
These tempting yet beneficial incentives are drawing in many companies moving away from China.
The government said, “Over the next 5 years, the approved companies under the PLI scheme are expected to lead to total production of more than Rs 10.5 lakh crore… The companies are also expected to promote exports significantly. Out of the total production, around 60% will be contributed by exports at Rs 6.5 lakh crore.”
The Government expects this scheme to create employment and revenue opportunities leading to the country’s economic growth.
Under this scheme, the government expects that the companies will generate more than 2 lakh direct job opportunities in the next 5 years. In addition, indirect employment will be 3 times the direct employment.
This move can also be a helping hand for the ‘Make in India’ initiative which will increase the share of manufacturing in the economy from the current 15% to 25%.
It will be interesting the effects of PLI on the pricing structure of electronics and smartphones once the manufacturing starts in India!