Mobile phone PLI has created 500k incremental jobs: Ashwini Vaishnaw

The government’s production-linked incentive (PLI) scheme has led to incremental job creation of 500,000 in the mobile phone industry, said Union Minister for Railways, Communications, Electronics & Information Technology Ashwini Vaishnaw on Thursday at the inauguration of Dixon Technologies (India)’s new smartphone manufacturing facility in Noida, Uttar Pradesh.

Vaishnaw claimed that the development of India’s design and component manufacturing ecosystem is “highly encouraging”, adding that domestic value addition is increasing by the day, and in some products, it is “as high as 60 per cent”.

Dixon, which is India’s largest home-grown electronics manufacturing services player, said it started manufacturing smartphones for the Chinese device maker Xiaomi in the third quarter (Q3) of calendar year 2023 (CY23), through its new manufacturing unit.

As many as 5,000 people will work to manufacture smartphones and feature phones at a large scale in the new unit, Vaishnaw said.

“We have a five-year-long association with Xiaomi India and are excited to start this new chapter that exemplifies synergy between our two organisations,” said Atul Lall, vice-chairman and managing director, Dixon Technologies (India).

The facility, operated by Padget Electronics — a wholly-owned smartphone manufacturing subsidiary of Dixon — spans 227,000 square feet and has been built with an investment of Rs 256 crore. It has an annual production capacity of 25 million units.

The development comes at a time when the Indian government has been prodding Chinese smartphone makers to export from India, in a bid to increase localisation in mobile phone production.

“We are delighted about the new state-of-the-art manufacturing facility, quality processes, and efficient production lines… We believe that this association will leverage our excellence and superior execution and Xiaomi’s expertise and leadership in the Indian business ecosystem,” said Sunil Vachani, executive chairman, Dixon Technologies (India).

In May this year, Dixon announced a partnership with Xiaomi India to manufacture and export Made-in-India smartphones. The Chinese mobile maker had also partnered home-grown Optiemus Infracom to manufacture wireless audio products during the same month.

As of Q3CY23, Xiaomi is the fourth-largest smartphone brand in India in terms of smartphone shipments, with a market share of 11.7 per cent, according to data from the International Data Corporation.

Dixon’s new facility is expected to aid the firm in fulfilling its manufacturing targets. Earlier this month, the manufacturing major also committed a cumulative production value of Rs 48,000 crore in six years and was declared eligible under the reworked PLI scheme for information technology products.

With this move, the company would account for a seventh of the additional production value of Rs 3.5 trillion which the government said has been committed collectively by 27 eligible companies in six years.