three-apple-suppliers-among-16-cos-that-get-nod-under-pli-scheme

Context: The Ministry of Electronics and IT has approved 16 proposals by electronics manufacturers, including Samsung, Foxconn, Lava and Micromax, entailing an investment of ₹11,000 crore under its Production Linked Incentive (PLI) Scheme.

  • Among the international firms approved, Foxconn Hon Hai, Wistron and Pegatron are contract manufacturers for Apple iPhones
  • Apple (37%) and Samsung (22%) together account for almost 60% of global sales revenue of mobile phones.
  • Among the domestic players, companies such as Lava, Micromax’s parent company Bhagwati Products, Padget Electronics, UTL Neolyncs, and Optiemus Electronics were granted approval by the IT Ministry

Production Linked Incentive (PLI) Scheme

  • Under the new PLI scheme, companies that set up new mobile and specified equipment manufacturing units or expanded their present units would get incentives of 4-6 per cent on incremental sales from goods made in India.
  • The PLI scheme aims to give out incentives worth Rs 5,334 crore in total in the first year, to be divided among all the successful applicants. 
  • The total incentive to be given to each company will be decided by an empowered committee.
    • It will have secretaries from the Department of Economic Affairs, Department of Expenditure, Department of Revenue, Department for Promotion of Industry and Internal Trade, Directorate General of Foreign Trade, apart from the MeitY secretary and the CEO of the Niti Aayog. 
  • Duration: It will cover target segments that are manufactured in India for a period of five years.

Possible benefits 

  • The companies would bring additional investment in electronics manufacturing to the tune of ₹11,000 crore.
  • They will generate more than two lakh direct employment opportunities in the next five years, along with the creation of additional indirect employment of almost three times the direct employment.
  • The approved companies under the PLI Scheme are expected to lead to total production of more than ₹10.50 lakh crore, of which around 60% will be exports.
  • The government expects domestic value addition to grow from the current 15-20% to 35-40% in case of mobile phones and 45-50% for electronic components.

Significance:

  • It will help in building a strong ecosystem across the value chain and integrating with the global value chains.
  • It will strengthen the electronics manufacturing ecosystem in the country.

Image source: Indian Express