Production Incentive Scheme (PLI) for Mobile Manufacturing and Specified Electronic Component
Updated: Apr 18, 2021
Major achievements in PLI being implemented:
The scheme extends an incentive of 4% to 6% on incremental sales for a period of five years subsequent to the base year. The scheme was notified on 01.04.2020; last date for application was 31.07.2020 and the scheme commenced on 01.08.2020.
The scheme has received a very encouraging response.16 applications were approved under the first round of the scheme (5 companies under Global Champions Category, 5 companies under Domestic Champions Category and 6 companies under the Electronic Components category) with an incentive outlay of INR 36,440 crore.
As per the Quarterly Review Reports for the quarter ending December 2020, in the first 5 months of scheme operation and despite challenging times, the applicant companies have produced goods worth ~INR 35,000 crore and invested ~INR 1,300 crore under the scheme. Additional employment generation during this period stands at around 22,000 jobs.
After the success of the First Round of PLI Scheme, the Second Round of PLI Scheme has been launched on 11.03.2021, which focuses on building a vibrant and robust electronic component manufacturing ecosystem. The last date for application was 31.03.2021. Under the Second Round, incentive of 5% to 3% shall be extended on incremental sales (over base year, i.e., 2019-20) of goods manufactured in India and covered under the target segment, to eligible companies, for a period of four years. Applications received under the Second Round of PLI Scheme for Large Scale Electronics Manufacturing are in the process of appraisal.
Response of major industry leaders for products:
The approved companies under the PLI Scheme for Large Scale Electronics Manufacturing include 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. Indian companies including Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics were approved under the scheme. These companies are expected to expand their manufacturing operations in a significant manner and grow into national champion companies in mobile phone production.
What kind of value addition will be brought in by the PLI- new types of industries, encouragement to MSMEs/ancillarisation, etc:
The PLI Scheme for Large Scale Electronics Manufacturing also focuses on building a vibrant and robust electronic components manufacturing ecosystem. This step will further strengthen product manufacturing in India for multiple sectors such as IT Hardware, LED Products, Automotive, Medical Devices, Solar Cells, Energy Storage, etc. for which other PLI Schemes are going to be implemented.