South Korean giant Samsung, Apple’s contract manufacturing partners Foxconn, Wistron and Pegatron, and Indian smartphone vendors Micromax and Lava among others have applied for India’s $6.6 billion incentive program aimed at boosting the local smartphone manufacturing, New Delhi said on Saturday.
The scheme, called Production-Linked Incentive Scheme, will offer a range of incentives to companies including a 6% financial incentive on additional sales of goods produced locally over five years, with 2019-2020 set as the base year, India’s IT Minister Ravi Shankar Prasad said in a press conference.
22 companies have applied for the incentive program — that also includes manufacturing of electronics components — and have agreed to export 60% of their locally produced units outside of India, said Prasad. He said the companies estimate they will produce smartphones and components worth $153 billion during the five-year duration.
The Production-Linked Incentive Scheme is aimed at turning India into a global hub of high-quality manufacturing of smartphones and support Prime Minister Narendra Modi’s push to make the country self-reliant, said Prasad.
A total of 22 companies have filed their application under the PLI Scheme. These companies will produce mobile phones and components worth Rs 11.5 lakh crore in the coming 5 years out of which products worth Rs 7 lakh crore will be exported. pic.twitter.com/3yUky3HkOC— Ravi Shankar Prasad (@rsprasad) August 1, 2020
As part of their applications, the companies have also agreed to offer direct and indirect employment to roughly 1.2 million Indians, the Indian minister said.
The interest of Samsung and Apple, two companies that account for more than 50% of the global smartphone sales revenue, in India is a testament of the opportunities they see in the world’s second largest internet market, said Prasad. “Apple and Samsung, India welcomes you with attractive policies. Now expand your presence in the country,” he said.
Missing from the list of companies that the Indian minister revealed today are Chinese smartphone makers Oppo, Vivo, OnePlus, and Realme that have not applied for the incentive program.
The Indian government did not prevent companies from any country from participating to the program, Prasad insisted in a call with reporters Saturday noon. Chinese smartphone vendors command roughly 80% of the Indian handset market, according to research firm Canalys.
“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,” he said. The deadline for applying to participate in India’s program, which began in April, ended on Friday this week.
The participation of Wistron, Foxconn, and Pegatron is also indicative of Apple’s future plans to produce locally in India. Apple’s contract manufacturing partner, Taiwan-based Wistron, first began assembling older iPhone models in 2017. Last month, Foxconn kickstarted assembly of a small batch of iPhone 11 units. This was the first time any Apple supplier assembled a current-generation iPhone model in the country.