Foxconn, Wistron, Samsung, Oppo Likely To Set Up New Plants Under India’s Rs 41,000 cr Production Linked Incentive Plan

Top global players including Foxconn and Wistron, Flex, Samsung, Oppo and Vivo are set to apply for the production-linked incentive scheme (PLI) worth Rs 41,000 crore that was unveiled by the Union government as part of its effort to catapult the country as a hub for electronics production, The Economic Times reported.

Union government yesterday (2 June) notified the Production Linked Incentive Scheme (PLI) for large Scale Electronics Manufacturing. Under the scheme government will provide financial incentive to boost domestic manufacturing and attract large investments in the electronics value chain including electronic components and semiconductor packaging.

Under the scheme, the union government will extend an incentive of 4 per cent to 6 per cent on incremental sales (over base year which is defined) of mobile phone and specified electronic components manufactured in India to eligible companies, for a period of five (5) years subsequent to the base year.

Besides Mobile phones, the specified components that will be covered under the scheme include

• SMT(Surface Mount Technologies) components,
• Discrete semiconductor devices including transistors, diodes, thyristors, etc.
• Passive components including resistors, capacitors, etc. for electronic applications Printed Circuit Boards (PCB), PCB laminates, prepregs, photopolymer films, PCB printing inks
• Sensors, transducers, actuators, crystals for electronic applications
• System in Package (SIP)
• Micro / Nano-electronic components such as Micro Electromechanical Systems (MEMS) and Nano Electromechanical Systems (NEMS)
• Assembly, Testing, Marking and Packaging (ATMP) units

Under the PLI scheme, the government will give out a total sum of Rs 40,951 crore in a graded manner to these domestic and global manufacturers in the next five years.

Addressing the press conference yesterday (June 2), IT and telecom minister Ravi Shankar Prasad stated that five to six global smartphone manufacturers will be setting up their production facilities in India with the PLI scheme. Prasad also confirmed that developing five domestic manufacturing companies will be incentivised under the scheme.

India’s share in global electronics manufacturing has grown from 1.3 per cent in 2012 to 3.0 per cent in 2018. The domestic production of electronics hardware has increased substantially from Rs 1,90,366 crore (USD 29 billion) in 2014-15 to Rs 4,58,006 Crore (USD 70 billion) in 2018-19.

With the domestic demand for electronics hardware expected to rise rapidly to approximately Rs 26,00,000 crore (USD 400 billion) by 2025, India faces the challenges of rapidly increasing foreign exchange outgo on account of import of electronics.

The union government also unveiled two other schemes to woo smartphone makers to move and set up manufacturing plants in India - Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and the Modified Electronics Manufacturing Clusters (EMC) 2.0.