Mobile companies commit Rs 11,000 cr investment under PLI scheme: ICEA

Industry body ICEA, which represents top mobile phone makers like Apple, Foxconn, Wistron, Lava, etc, on Saturday said companies have committed investments worth Rs 11,000 crore under the PLI scheme and they will surpass manufacturing estimates by 2 to 2.5 times.

Major global players Samsung Wistron, Pegatron, Foxconn and Hon Hai and Indian companies such as Lava, Dixon, Micromax, Padget Electronics, Sojo, UTL and Optiemus have applied for benefits under the production-linked incentive (PLI) scheme.

According to the estimates of India Cellular and Electronics Association (ICEA), mobile phone companies will increase devices production in the country to around Rs 27.5 trillion on higher side under the PLI compared to government's announcement of Rs 11 trillion.

Union telecom and IT minister Ravi Shankar Prasad has announced that as many as 22 domestic and international firms have lined up with proposals for mobile phones production worth Rs 11 trillion , which have potential to create direct and indirect jobs for around 1.2 million people over the next five years.

"Applications received under the PLI scheme with cumulative investment commitments worth Rs 11,000 crore, total production of mobile phones at Rs 11.50 trillion with 60 per cent production reserved for exports, generation of 300,000 direct jobs...considered to be an extraordinary feat for the government's commitments towards Make in India and Aatmanirbhar Bharat objectives," ICEA Chairman Pankaj Mohindroo said in a statement.

He said that enhancing domestic value addition in the production locally to grow to 3540 per cent from the current 1520 per cent is also a major move towards creating self-reliant India.

"These were conservative numbers and the industry will surpass these by 2-2.5 times," Mohindroo said.

At present mobile phone production in the country is estimated to be over Rs 2 trillion per annum, employing around 500,000-600,000 people.

Prasad said that a total application under the PLI scheme has come from various countries including Taiwan, South Korea, Germany, Austria, etc.

"The benchmark for international companies was that they make mobile phones priced at or above Rs 15,000. International companies that have applied are Samsung, Foxconn Hon Hai, Rising Star, Wistron and Pegatron," Prasad said.

Foxconn Hon Hai, Wistron and Pegatron are contract manufacturers for Apple iPhones.

In terms of revenue, Apple accounts for 37 per cent and Samsung 22 per cent for global sales of mobile phones and the PLI scheme is expected to increase their manufacturing base manifold in the country, an official statement issued by the Ministry of Electronics and IT (Meity) said.

The minister further said these companies will make thousands of crores investments based on the approval of their proposal

The companies that have applied for components production of around Rs 45,000 crore include AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, Vitesco and Neolync.

The government notified production-linked incentive scheme for large scale electronics manufacturing, the scheme for promotion of manufacturing of electronic components and semiconductors, and the modified electronics manufacturing clusters (EMC 2.0) scheme.

The government expects to attract Rs 1 trillion investment in the sector and sees a target manufacturing revenue potential of Rs 10 trillion by 2025.

The fresh proposals have exceeded the government's manufacturing revenue target but the final outcome will depend on the decision of the screening committee that will select projects eligible for incentives.