Foxconn, Apple and Samsung to receive Rs 4,400 cr under smartphone PLI scheme | News – Business standard
Apple Inc and Samsung, along with their contract manufacturers in India, are expected to receive over Rs 4,400 crore in incentives for meeting production targets by financial year 2023 under the government’s production-linked incentive (PLI) scheme for smartphones, according to a government report. report of the Economic Times (ET). Beneficiaries also include Foxconn (Hon Hai), Wistron (now owned by Tata Group), Pegatron, Samsung and homegrown electronics company Dixon Technologies.
The original plans had identified an outlay of Rs 6,504 crore for FY 2024; However, not all companies selected for the scheme met the outlined production targets. The full amount will therefore not be used.
Companies that missed their PLI targets include Indian companies Lava and Optiemus Electronics, as well as Rising Star (Bharat FIH), a smartphone contract manufacturer for China’s Xiaomi.
Four out of five global companies met targets in FY23, resulting in the highest amount paid out under the scheme to date in FY24.
The government has released around Rs 2,500 crore under the scheme, with Rs 500 crore disbursed to Samsung for meeting targets in the first year and Rs 1,700-2,000 crore released for the three contract manufacturers Apple and Dixon.
PLI schemes for smartphones
Under the PLI scheme for smartphones, companies will receive incentives a year after achieving production targets. Those who exceed targets can claim additional benefits from the remaining funds not used by companies that have failed to achieve their targets.
Incentives are given in the form of cashback, with a six percent discount on additional sales during the first two years, followed by five percent for the third and fourth years, and four percent for the fifth year.
To claim these benefits, companies like Samsung and Apple’s contract manufacturers will have to invest a minimum of Rs 250 crore in the first year of the scheme. A similar investment is required for each subsequent year. In terms of production, global companies are required to produce additional goods, especially mobile phones worth Rs 15,000 and above, which amounts to Rs 4,000 crore, Rs 8,000 crore, Rs 15,000 crore, Rs 25,000 crore and Rs 50,000 crore in the last year of the scheme.
Since its introduction in fiscal 2021, the PLI scheme has undergone revisions after most beneficiaries failed to meet targets in the first year, with the exception of Samsung.
The impact of the PLI scheme on the Indian electronics sector has been significant, with mobile phone exports reaching $10.5 billion between April and December 2023.
First print: March 4, 2024 | 9:44 am IST