The major iPhone assemblers of Apple Inc., among many other companies are expected to get approval by the Government of India to participate in a $6.6 billion stimulus program aimed at bringing manufacturing to India. We saw the report first on Bloomberg that said the information came from people familiar with the matter.
According to the report, the Union Government of India will approve a plan in a cabinet meeting on Wednesday, aimed at bringing $150 billion in mobile phone manufacturing over the next five years. The Govt. has already cleared three companies viz. the Foxconn Group, Pegatron Corp., and Wistron Corp., among many other phone makers. The factories of these companies are currently located mainly in China that makes almost every iPhone on the planet.
GoI Will Manufacturing Incentives
The Govt. of India is aiming to make India a manufacturing hub in the coming years. It has initiated a Production Linked Incentive (or PLI) program for the manufacturers to make goods in India. Under this program, the Govt. will raise the incentives each year to lure major smartphone brands to make their products in India. The Govt. has currently offered five slots for the foreign companies to apply for the program. And, Samsung Electronics is the only company to apply for the incentive program besides the iPhone makers.
Amid the rising reluctance towards China due to the COVID-19 outbreak in Wuhan, the Indian government is in no mood to lose this opportunity and attract manufacturers to India.
Indian Brands Also Apply for Incentives
According to Hari Om, the chairman and founder of Lava Mobiles, the next five years will be dramatic. He said that India could become the new China in phone manufacturing. Talking about the move to woo Apple, he said that the initiative by the government was thoughtful as the entire ecosystem will shift if Apple shifts its production to India.
Lava International Ltd. has also applied for the manufacturing incentives along with Dixon Technologies India Ltd. and Karbonn Mobiles.
Terms for Receiving Incentives
The Govt. has fixed specific investment and production targets for foreign phone makers that they need to comply with to receive the incentives. All foreign companies must commit to the terms of selling for at least $200 (₹15,000). However, there are no such restrictions to the Indian phone makers.
The chairman of India Cellular and Electronics Association, Pankaj Mohindroo, said India’s incentive scheme could be a game-changer. He said that by 20125, it has the potential to make the country No. 1, or at least No. 2 in mobile manufacturing.