A boost to Make in India

Make in India was launched by the Government of India on 25 September 2014 to encourage companies to manufacture their products in India and incentivize with dedicated investments into manufacturing.The policy approach was to create a conducive environment for investments, develop modern and efficient infrastructure, and open up new sectors for foreign capital. The initiative targeted 25 economic sectors for job creation and skill enhancement, and aimed "to transform India into a global design and manufacturing hub”

In order to give this program a push, The Electronics and Information Technology Ministry had announced the Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing in April 2020 in the wake of the coronavirus and growing tensions with China.

What is the PLI?

The PLI scheme offers production linked incentives to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units.

The Scheme will be implemented through a Nodal Agency which shall act as a Project Management Agency (PMA) and be responsible for providing secretarial, managerial and implementation support and carrying out other responsibilities as assigned by the Ministry from time to time.

Who benefits from this scheme?

This scheme involves the ATMP units for mobile phones and other electronic components such as transistors, diodes, thyristors, resistors, capacitors and nano-electronic components such as micro electromechanical systems.

Companies that make mobile phones which sell for Rs 15,000 or more will get an incentive of up to 6 per cent on incremental sales of all such mobile phones made in India. In the same category, companies which are owned by Indian nationals and make such mobile phones, the incentive has been kept at Rs 200 crore for the next four years.

The scheme will attract big foreign investment in the sector, while also encouraging domestic mobile phone makers to expand their units and presence in India. All electronic manufacturing companies which are either Indian or have a registered unit in India will be eligible to apply for the scheme.

These companies can either create a new unit or seek incentives for their existing units from one or more locations in India. There has been considerable interest expressed in this scheme by the industry.

Industry response

This scheme has gained immense attraction from major brands and corporates around the world. The government has said that a total of 22 companies, including the likes of Samsung and Foxconn, have already filed applications under the Production-Linked Incentive (PLI) scheme that aims to boost local manufacturing of mobile phones and components.

This is expected to bring in additional investment of about ₹11,000 crore in electronics manufacturing, while leading to total production worth ₹11.5 lakh crore over the next five years.