Target set by the Centre for locally manufactured smartphones exceeds by over 50%; make in India lion finally roaring.

Make in India lion which was in a deep slumber and was doomed to be a failure is back roaring again. Smartphones worth 5 billion dollars are set to be manufactured for FY 2022 under the flagship PLI scheme, exceeding the target set by the government by a whopping 50%. Around 2 billion dollars of this total is expected to come from exports of the smartphones produced in India. For FY 21, the locally manufactured smartphones amounted to 3 billion dollars.

PLI- product linked incentive was a scheme launched by the government to make India a manufacturing hub by taking advantage of the prevailing geopolitical tensions regarding China by weaning manufacturers away and making them invest in India. PLI scheme had promised incentives of around 39,000 crores spread over 5 years to smartphone manufacturers.

Samsung, Apple’s three contract manufacturers – Pegatron, Foxconn’s Hon Hai, and Wistron, along with another Foxconn unit Rising Star (now Bharat FIH) were the 5 companies chosen under the global manufacturer’s smartphone segment of the PLI scheme.

The government’s target for FY22 was close to 3.2 billion for the qualifying applicants. Pegatron and Bharat FIH are yet to avail the benefits under this scheme. Pegatron has still not started its production which will commence in the next few months while Bharat FIH makes phones in the category of less than 15,000 which is not covered under this scheme.

Apple logged its best year in India with a record shipping of 6 million units backed by aggressive marketing and local manufacturing. The smartphone maker cornered a market share of 70% percent in the super-premium category up from 50% last year. The US-based company is already making most of its devices in India through contract manufacturers Foxconn and Wistron hence increasing sales along with margins.

Recently the government also launched a PLI scheme worth 18,000 crores for battery manufacturing in India. The Government had approved the PLI scheme ‘National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ for achieving a manufacturing capacity of 50 Giga Watt Hour (GWh) of ACC for enhancing the country’s manufacturing capabilities with a budgetary outlay of ₹ 18,100 crores.

The selected firms will have to set up the manufacturing units within 2 years and the incentives will be provided for a total of 5 years since the day sales start. RIL subsidiary Reliance New Energy Solar, Hyundai Global Motors, Ola Electric, Mahindra & Mahindra, and Larsen & Toubro are among the many firms which submitted the bids. The scheme received an overwhelming response as the bids received is over 2.6 times the manufacturing capacity to be awarded- 50GW.

This scheme envisages indigenous supply chain and deep localization of battery manufacturing in India, helping the country to reduce its dependence on crude oil by promoting renewable energy and EV automobile industry.