$5 Billion worth handsets will be manufactured by Apple and Samsung under the Central Government’s Production Linked Incentive (PLI) Scheme in Financial Year 2022 (FY22). This is higher than the target set by the Indian government, which is 50%. This scheme and target are good news for the Indian Economy.
In the Financial Year 2022 around $2 Billion worth smartphones will be exported from India. According to a senior government official, this year the companies will exceed the expected targets and it will keep on improving in the coming years.
Over a span of 5 year a total of Indian Rs.39,000 crores ( $390 Billion) will be provided as incentives under the PLI Scheme. The Government of India had launched this scheme to attract and promote manufacturing opportunities in their country. The main aim behind the PLI Scheme is to shift the manufacturers from China to India.
Under the PLI Scheme, Pegatron, Wistron Foxconn Hon Hai and Bharat FIH are the applicants that will be part taking in the Government Scheme and manufacture smartphones in the Global Manufacturer Segment. For the applicants who qualifies under PLI Scheme FY22 will be achieving the target of $3.2 Billion.
Within a few months the Pegatron will start its operation in the country. It is the second largest manufacturer for Apple and Samsung smartphones after Foxconn. For the Chinese company Xiaomi, Bharat FIH manufacturers the smartphones. The unit cost of Xiaomi smartphones is below Indian Rs.15000 ( $201). Therefore the Bharat FIH does not qualifies for the PLI Scheme.
If the company succeeds in attaining their government set targets, the government allotted incentives will be given to them. The incentives mean that if company will meet its target, government will pay 6% of the cost of production. The PLI Scheme is likely to attract more manufacturers and it will push the economy to growth.
Lets hope our country Pakistan also starts thinking in the same way and start creating such attractive schemes and incentives to attract big tech giants to start manufacturing in our country.