Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing by the Government of India offers a production linked incentive to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units. The Scheme is aimed at boosting the electronics manufacturing landscape and establish India at the global level in electronics sector.
The scheme shall extend an incentive of 4% to 6% on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies, for a period of five (5) years subsequent to the base year as defined.
India’s share in global electronics manufacturing has grown from 1.3% in 2012 to 3.0% in 2018. The
domestic production of electronics hardware has increased substantially from INR 1,90,366 crore
(USD 29 billion) in 2014-15 to INR 4,58,006 Crore (USD 70 billion) in 2018-19. The domestic
demand for electronics hardware is expected to rise rapidly to approximately INR 26, 00,000 crore (USD
400 billion) by 2025.
While giving approval of eligible applicants under the PLI Scheme, Ravi Shankar Prasad, Union Minister for Electronics & IT, Communications, Law and Justice said that PLI scheme has been huge success in terms of the applications received from Global as well as Domestic Mobile Phone manufacturing companies and electronic components manufacturers. The minister further said that “we are optimistic and looking forward to building a strong ecosystem across the value chain and integrating with the global value chains, thereby strengthening electronics manufacturing ecosystem in the country”.
The international mobile phone manufacturing companies that are approved under Mobile Phone (Invoice Value INR 15,000 and above) Segment are Samsung, Foxconn Hon Hai, Rising Star, Wistron and Pegatron. Out of these, 3 companies namely Foxconn 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.
Under Mobile Phone (Domestic Companies) Segment, Indian companies including Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics are approved by MeitY. These companies are expected to expand their manufacturing operations in a significant manner and grow into national champion companies in mobile phone production.
6 companies are approved under the Specified Electronic Components Segment which include AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, and Neolync.
Over the next 5 years, the approved companies under the PLI Scheme are expected to lead to total production of more than INR 10,50,000 crore. Out of the total production, the approved companies under Mobile Phone (Invoice Value INR 15,000 and above) segment have proposed a production of over INR 9,00,000 crore, The approved companies under Mobile Phone (Domestic Companies) segment have proposed a production of about INR 1,25,000 crore and those under Specified Electronic Components segment have proposed a production of over INR 15,000 crore.
The companies approved under the scheme are expected to generate more than 200,000 direct employment opportunities in next 5 years along with 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 case of Mobile Phones and 45-50% for electronic components.