Leading international companies are expanding production at their newly setup units in India after the government launched attractive initiatives such as the production-linked incentive (PLI) scheme for smartphones and other technology-driven sectors, Girija Pande, chairman of Apex Avalon Consultancy, said on Monday.
Buoyed by the surge in interest from global manufacturers, the government is also planning PLI for other sectors to boost domestic manufacturing of wearable devices such as smartwatches.
Such incentives would help India increase manufacturing’s share in the GDP to 25 per cent in the coming years from the current 17-18 per cent, he pointed out.
The PLI schemes will help India export electronic/IT goods worth Rs 2.45 trillion a year.
“While the government’s intention is to bring the five largest companies of the world manufacturing laptops or tablets to India, supported by PLI offer, Apple Inc and Samsung are already expanding production of mobile phones from their Indian plants,” Pande told PTI.
Simultaneously, the government is reforming rules and regulations to have the final products meet the Asian standards which has been welcomed by global manufacturers working to keep up with the consumer demand in India as well as the growing opportunities for exports, Pande added.
“Apple may bring iPad tablet manufacturing to what is fast emerging as the world’s new tech manufacturing hub (India) for electronic items — mobile phones, IT and electronic hardware,” he said, highlighting the advantage of PLI at a recent virtual conference organised by the Indian Importers Chamber of Commerce and Industry, the High Commission of India here and ‘easy Trade Connect’.
Apple has steadily raised production of iPhones in India to lessen its dependence on Chinese manufacturing. Apple took part in the Indian scheme via its usual global contract manufacturers, observed Pande, whose seven-year told Singapore consultancy promotes investments into India.
“Reflecting confidence in the Indian market, Apple has ramped up manufacturing of iPhones in India via the local units of Taiwan’s Foxconn Technology Group and Wistron Group,” he said.
A third contractor from Taiwan, Pegatron Corp, also set up a base in India last year. Foxconn has pledged to invest up to USD 1 billion to expand a factory in southern India where the Taiwanese contract manufacturer assembles iPhones.
The three Apple suppliers are said to be planning investments of roughly USD 900 million over five years.
Samsung as well as Indian firms such as Dixon Technologies, UTL, Neolyncs, Lava International, Optiemus Electronics and Micromax are also expanding their factories to take advantage of the PLI scheme.
With the consolidation of Apple’s manufacturing base and Tesla Inc’s entry to India, 2021 is shaping up to be the year that heralds the arrival of the country as a manufacturing hub for the world.
Ola, a major ride services player, is setting up a new factory — the world’s largest two-wheeler facility — on a 500-acre plot in Tamil Nadu. This facility will churn out 10 million electric scooters and two-wheelers once it reaches full capacity by June-July 2022.
Pande also said “the government currently has no intention to stop with incentives for attracting imports of value-added items that can be re-assembled or incorporated into Indian origin products and re-exported.”