The Indian Government has chalked a plan of Rs 42000 crore Production Linked Inventive Package (PLI) for boosting mobile phone manufacturing companies.
Companies who are selling state of the art devices, i.e. Apple, Samsung etc. will get a real advantage.
Till date, this will be the biggest incentive package for easing domestic manufacturing of smartphones and its components. This package will be covered companies who are going to offer 4 to 6% profit on incremental sales. Apart from Samsung and Apple other homegrown players like Micromax, Karbonn, Lava, Intex will also be beneficial.
The PLI scheme rolled out by the IT Ministry, designed along with Finance Ministry and Ministry of Commerce. The main aim of the scheme is to make India a hub for the manufacturing of smartphone, other electronics and their components. India wants to maintain its standard parallel to China and Vietnam as informed by an in house newspaper source.
While researching on the present scenario the R& D department of the IT Ministry said- the electronic hardware manufacturing sector faces a lot of issues especially the lack of having a level playing field. They also suffer from 8.5% to 11% disability on having proper infrastructure, logistics, domestic supply chain, costly financial services and limited design infrastructure. They also identified inadequate skill development in the manufacturing field.
Some companies for example Oppo, Vivo and Samsung is not too happy about the scheme as it only covers phones above $200 (14100 INR approx.) while most of their smartphones priced less than the mentioned price. Companies owned by resident Indian citizens like Karbonn, Lava, Micromax which are still struggling might get benefit from the scheme.
Another reason of sanctioning the bill is the Government want to harness the growing cost of electronic imports. The incentive scheme will help in generating incremental production of around 8.2 Lakh crores of mobile phones and their accessories. Their export can generate around 5.8 Lakh crore. Moreover, the scheme will also create around 2 lakh new jobs that aims to contribute approximately Rs 4782 crore tax revenue.
The amount of the scheme will be initially available for new applications on prior approval. This centrally-sponsored package designed the way it won’t overlap any existing electronics manufacturing schemes. According to a source- with this scheme, India will be well-positioned as a global hub in the manufacturing of electronics devices, soon will become a destination for mobile phone exports.
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