/PLI to create new Champions of Growth

PLI to create new Champions of Growth

mobile manufacturing

The new and improved Production Linked Incentive worth Rs 41,000 crore will push more global investments to India and also help increase the production capacity of the existing players, thus creating new champions of growth and employment.

Yesterday, Union Minister for IT and Telecom, Ravi Shankar Prasad, announced some changes to the PLI scheme which aims to create five Indian champions in mobile and electronics manufacturing availing this mega scheme. Five Global Champion Companies will also get incentive out of this scheme. This has come days after Prime Minister Narendra Modi gave a new call, ‘Vocal for Local’.

“This scheme is a game-changer for the nation and the industry,” said Pankaj Mohindroo, Chairman, ICEA. “The Production Linked Incentive (PLI) instituted on mobile phones is indeed the first-ever scheme ever announced by a Government in the Post – Independence period, whereby, similar production linked incentive is extended for both domestic Indian champions and global supply,” added Mohindroo.

The Union government is inviting applications for three schemes, PLI, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme. The overall amount stands at Rs 50,000 crore.

Announced under National Policy on Electronics (NPE) 2019 worth Rs 41,000 crore, PLI seeks to encourage Make in India products in mobile and electronics domain and push for export out of India, bringing more revenue and thus will lead to creation of more jobs in the country.

Faisal Kawoosa, Founder and Chief Analyst at techARC said, “They have now an incentive to set up larger capacities with more manufacturing value addition, as some of the production will be consumed through exports.”

Faisal feels that the new and emerging technologies such as 5G should be given preference under this newly announced schemes. He added, “The issue I have is that we are not differentiating between the latest technology and almost obsolete ones. I want government to give folks more incentives who bring in new technology, say 5G. What’s the point in promoting feature phone manufacturing right now. Sooner or later it will die and all our incentives will be wasted.”

All the major mobile manufacturers such as Samsung, Oppo and Vivo are likely to get the benefits of PLI schemes. Global vendors such as Foxconn, Flex and Wistron are most likely to be contesting for the incentives. Government is also eyeing other major electronics players such as Pegatron to shift its base to India.

“As enterprises seek to de-risk their supply chains, and build resiliency to protect themselves from future shocks, including trade wars and pandemics, India’s PLI scheme will give a significant impetus to ‘Make in India’. It will attract incumbents as well as new entrants to ramp-up their electronics manufacturing in India. The plan’s success will need to be evaluated in terms of the rise in overall production, in component manufacturing, as well as in terms of employment generated,” said Prabhu Ram, Head-Industry Intelligence Group, CMR.

Now the ball is in the court of Indian players as how will they get the benefits out of 41,000 crore under PLI. The homegrown mobile maker, Lava, is the sole contender at the moment. Other local vendors such as Micromax, Intex and Karbonn are nowhere to be seen at the moment.

Hari Om Rai, Chairman and Managing Director, Lava, said, “Differentiated PLI for Indian companies shows the true commitment of the government towards Aatm Nirbhar Bharat. It would enable us to aquire skills and technologies for global competitiveness. It is the right step towards long term financial and technological independence of the country.”

The COVID-19 has created an opportunity for us to attract and invite global companies to India and set up their manufacturing. The combined PLI scheme will help us create more jobs and at the same time will give incentive based on performance to these global investors as well as to the local creators. The Government of India wants to create Champions, both local and global, under this newly announced schemes. The Ministry and industry body ICEA, believe that the mobile and electronics will drive the growth vehicle in days to come. The Champion sector is going to create many champions and will help us become self-reliant or Aatmnirbhar.

Haider is an avid writer on technology who loves to try new innovations. He holds a degree in English Journalism from the prestigious Indian Institute of Mass Communication (IIMC), New Delhi. Besides that, he likes to travel and explore new places.

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