PLI scheme to hasten process to make India top mobile manufacturing country: ICEA

The product link incentive scheme for electronics manufacturing will expedite the process to make India top destination for mobile production, industry body India Cellular and Electronics Association said on Tuesday. India at present is the world's second largest mobile phone manufacturer after China, with a total value of annual production estimated to have crossed over Rs 2 lakh crore in 2019-20.

"The PLI instituted on mobile phones is indeed the first ever scheme ever announced by a government in the post–independence period, whereby, similar production linked incentive is extended for both domestic Indian champions and global supply. "The policy was a result of ICEA's relentless focus and strenuous efforts put forth during the past 3-4 years along with the government," ICEA Chairman Pankaj Mohindroo said in a statement.

The Ministry of Electronics and IT on Tuesday started inviting application under the three schemes notified on April 1, 2020 which are "Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors" (SPECS), Modified Electronics Manufacturing Clusters (EMC 2.0), and and production linked incentive (PLI) for large scale manufacturing. The three schemes jointly offer incentives of around Rs 50,000 crore spread over a period of five years.

Global mobile phone companies with at least Rs 10,000 crore consolidated revenue in 2019-20 and selling handsets priced over Rs 15,000 a unit will be eligible for the PLI scheme, according to the guidelines issued by the government. Apple's manufacturing partner Wistron India said the PLI scheme is a financial incentive to boost domestic manufacturing and attract large investments in the electronics value chain.

"We thank the Indian government for such an incentive launch and appreciate the great effort. Wistron is looking forward to further expanding our customer base in India," Wistron India CEO David Shen said in a statement. Xiaomi India, Chief Operating Officer Muralikrishnan B said the scheme will play a vital role in encouraging employment generation and contribute directly to the country's economic growth at large.

"Production Link incentive, electronic manufacturing cluster scheme and especially the SPECS scheme that helps overcome disabilities of manufacturing electronic components in India, will provide the needed impetus to increase the manufacturing capacity of the country," Muralikrishnan added. Domestic companies with minimum revenue of Rs 100 crore in 2019-20 can apply for the scheme and there is no cap on the price of handsets to be sold by them.

Home grown mobile company Lava International chairman and managing director Hari Om Rai said that differentiated PLI for Indian companies shows the true commitment of the government towards Atmanirbhar Bharat. "It would enable us to acquire skills and technologies for global competitiveness. It is the right step towards long term financial and technological independence of the country," Rai said.

Mohindroo said that India had eclipsed Vietnam in 2017 to claim the world's second largest mobile handset manufacturing nation tag by recording about 1,100 per cent growth in value terms during 2014 – 2019, as well as exports registering an about 3,000 per cent increase in 2016-19. IT hardware makers body Mait said the mobile manufacturing industry is very positive about the move and this scheme will help meet the targets under the National Policy on Electronics 2019. "The interruption in the global supply chain due to the pandemic gives India an opportunity to increase export-led manufacturing and broadening the scope of PLI to all other major sectors of electronics such as consumer electronics, ICT, CPE products, computers, medical electronics etc will be a game-changer," Mait President Nitin Kunkolienker said.