Samsung, Foxconn apply for PLI scheme, Chinese cos stay away despite govt saying no bar on any country

Indian companies such as Lava International, Dixon Technologies, Micromax Informatics, and Padget Electronics have also applied for the scheme, IT minister Ravi Shankar Prasad said.

The Ministry of Electronics and Information Technology (MeitY) on Saturday said that as many as 22 global and Indian mobile handset makers and another 40 electronic component manufacturers had applied to set up new units or expand existing plants under the production linked incentive (PLI) scheme.

As reported earlier by The Indian Express, Samsung and Apple’s contract manufacturer Foxconn were among the applicants for the scheme, along with other global companies such as Pegatron, Winston, and Rising Star. Samsung and Apple’s phones corner about 60% of the global handset market in the medium to high price range.

Indian companies such as Lava International, Dixon Technologies, Micromax Informatics, and Padget Electronics have also applied for the scheme, IT minister Ravi Shankar Prasad said.

Though the government insisted that they had not stopped companies of any country from applying, most Chinese handset as well as component makers, which corner about 70 per cent of the global market, were absent from the list.

“This particular scheme is not against any country. I do not wish to take the name of any country. We have got rules and regulations with regard to our security of the country. All those compliances are very important,” Prasad said.

The government estimates that the global and Indian companies, which have applied under the PLI scheme will produce goods worth Rs 11.5 lakh crore over the next five years, of which nearly 60 per cent or goods worth Rs 7 lakh crore will be exported.

An estimated 3 lakh people will be employed directly in these units, while about 9 lakh people are expected to receive indirect employment once these plants start functioning, Prasad said.

The government had earlier this year in April notified the new PLI scheme, under which companies which set up new mobile and specified equipment manufacturing units or expanded their present units would get incentives of 4 to 6 per cent on incremental sales from good made in India. It had then said that interested companies could apply for the scheme until July 31.

The scheme, open for a total of five years, aims to give out incentives worth Rs 5,334 crore in total in the first year, to be divided among all the successful applicants. The expenditure on PLI scheme over five years is expected to be around Rs 41,000 crore, the government had then said.

Under the scheme, for international mobile handset making companies, the minimum retail invoice price per unit has been set at Rs 15,000 to avail benefits and the incentive for the first year has been fixed at 6 per cent of their incremental sales.

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Though there is no such minimum retail invoice price per unit for Indian companies, the total incentive over five years for such firms has been capped at Rs 200 crore.