Technology
India is implementing a $6.7 billion program to improve manufacturing electronics
India unveiled Tuesday a $6.65 billion plan to improve manufacturing of electronics, saying it will start by offering five global smartphone makers incentives to develop or expand domestic production.
The government is providing a production-linked incentive (PLI) that includes cash worth 4 to 6 percent of additional sales of products produced locally over five years, with 2019-2020 being the base year, technology minister Ravi Shankar Prasad told a news conference.
Names of the five companies that will have to meet investment and sales requirements in order to apply were expected to be revealed in the next two months, officials at the ministry said.
Five Indian firms will also be chosen for the PLI scheme, which along with two other related initiatives will enable India to produce 10 trillion rupees ($133 billion) of smartphones and components by 2025, Prasad said.
The smartphone industry has been a showpiece of the 'Make In India' campaign by Prime Minister Narendra Modi. Now, the government aims to make the nation a center of exports.
Global players including Samsung and Taiwanese firms Foxconn and Wistron, both of which supply Apple, have also ramped up local production, attracted by India 's massive 1.3 billion-person market.
The new strategy also includes schemes for pushing up component demand and building manufacturing clusters with pre-built factory sheds and specific facilities for companies to move in immediately.
"We want the bridegrooms to come but we want the whole wedding procession as well. A company coming (to India) should bring their ancillaries' entire procession, too," Prasad said.
The strategy comes when more businesses are looking outside of China for manufacturing sites where the coronavirus pandemic has disrupted global supply chains. India, which provides cheap labor, has more than 1 billion mobile connections but less than half that number of smartphones, creating a big potential market for manufacturers.
