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Mumbai, NFAPost: India has geared to become a global electronic manufacturing hub. Union Minister for Electronics & IT, Communications, Law and Justice Ravi Shankar Prasad said that the government has received a warm response to the production linked incentive scheme it had rolled out to boost electronic manufacturing in the country.

The minister also invited global mobile manufacturing stalwarts including Apple and Samsung to intensify manufacturing in India.

In a tweet Union Minister Ravi Shankar Prasad made it clear that said under the leadership of PM @narendramodi, PLI scheme was introduced to welcome global companies and to make Indian companies as national champions in the electronics sector.

“I welcome the Indian companies Lava, Dixon, Micromax, Padget Electronics, Sojo and Optiemus Electronics.” There are 10 companies that have filed applications under the Specified Electronic Components Segment which include AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, Vitesco and Neolync,” states the tweet.

The Union minister Ravi Shankar Prasad said, with these strong attributes India can emerge as the world leader in electronics manufacturing.

Production Linked Incentive Scheme (PLI)

The Production Linked Incentive Scheme (PLI) scheme has been a huge success in terms of the applications received from global as well as domestic mobile phone manufacturing companies and electronic components manufacturers. The industry has reposed its faith in India’s stellar progress as a world-class manufacturing destination and this resonates strongly with Prime Minister’s clarion call of AtmaNirbhar Bharat – a self-reliant India.

Minister further said that the government is optimistic and looking forward to building a strong ecosystem across the value chain and integrating with the global value chains, thereby strengthening the electronics manufacturing ecosystem in the country”.

A total of 22 companies have filed their application under the PLI Scheme. The international mobile phone manufacturing companies that have applied under Mobile Phone (Invoice Value Rs 15,000 and above) Segment are Samsung, Foxcon Hon Hai, Rising Star, Wistron and Pegatron.

Supply chain

Out of these, 3 companies namely Foxcon Hon Hai, Wistron and Pegatron are contract manufacturers for Apple iPhones. Apple (37%) and Samsung (22%) together account for nearly 60% of global sales revenue of mobile phones and this scheme is expected to increase their manufacturing base manifold in the country.

Ravi Shankar Prasad also stressed on development of a deep supply chain in the country. He informed that the domestic value addition due to these manufacturing has increased nearly to 40% from 20%.

He said electronic manufacturing units in the country have increased from 6 crore to nearly 33 crores in a short period. Prasad said the sector will generate 3 lakh direct and 9 lakh indirect jobs in the country.

Production Linked Incentive Scheme (PLI)for Large Scale Electronics Manufacturing was notified on 1st April 2020. PLI Scheme extends an incentive of 4% to 6% on incremental sales (over base year) of goods under target segments that are manufactured in India to eligible companies, for a period of five years subsequent to the base year (FY2019-20). The scheme was open for filing applications till 31.07.2020. Incentives are applicable under the scheme from 01.08.2020.

Mobile production

The Scheme is expected to lead to the total production of about Rs 11,50,000 crore over the next five years. Out of the total production, companies under Mobile Phone (Invoice Value Rs 15,000 and above) segment have proposed production of over Rs 9,00,000 crore, The companies under Mobile Phone (Domestic Companies) segment have proposed production of about Rs 2,00,000 crore and those under Specified Electronic Components segment have proposed a production of over Rs 45,000 crore.

The scheme is expected to promote exports significantly. Out of the total production of Rs 11,50,000 crore in the next 5 years, more than 60% will be contributed by exports of the order of Rs 7,00,000 crore. The scheme will bring additional investment in electronics manufacturing to the tune of Rs 11,000 crore.

The scheme will generate approximately 3 lakh direct employment opportunities in the next 5 years along with the creation of additional indirect employment of nearly 3 times the direct employment. Domestic Value Addition is expected to grow from the current 15-20% to 35-40% in the case of Mobile Phones and 45-50% for electronic components.

With the demand for electronics in India expected to grow manifold by 2025. The Minister expressed confidence that PLI scheme and other initiatives to promote electronics manufacturing will help in making India and would create the domestic champion companies in electronics manufacturing under the Scheme will give fillip to vocal for local while aiming for global scale.

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