The Indian government has approved the applications of around 16 electronic manufacturers as a part of its Production-Linked Incentive (PLI) Scheme. Among them, 10 are leading mobile phone companies including Samsung and Apple’s suppliers Foxconn, Wistron and Pegatron as well as Indian firms. The move by the government of incentivising these companies is in its bid to increase exports.
While Samsung has reportedly committed to exporting over Rs 2.2 trillion worth of smartphones, the domestic manufacturers have proposed a production output of around Rs 1.25 lakh crores in the next five years, according to the Ministry of Electronics and Information Technology. Furthermore, the companies under PLI Scheme are also expected to generate almost 2 lakh employment opportunities, which is undoubtedly a good tiding for the country especially at times like today when thousands of people are being laid off from work.
With countries like Vietnam and China leading the global exports market, roping in such well-known companies will help in making India a competitive destination for smartphones manufacturing. For Apple, the PLI scheme has come off as a boon as this would allow it to avoid India’s heavy import taxes on its products. This can hopefully result in a price drop of Apple products, making them relatively more affordable and increase the company’s presence in the country. Currently, Apple only holds around 2 per cent of India’s smartphone market. Moreover, with the rising global pressure and criticism on China, the move by the Indian government provides an opportunity for the manufacturers who are looking to diversify their supply chains.
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According to the scheme, manufacturing incentives will rise each year and by boosting local production, India hopes to capture at least 10 per cent of global smartphone manufacturing market in the next five years.