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India looks to boost electronics manufacturing

India has launched a $6.6 billion plan to boost electronics manufacturing, and is offering five global smartphone makers incentives to establish or expand domestic production.

The names of the five companies, which will need to meet investment and sales thresholds to be eligible, are expected to be announced in the next two months, according to government officials. The government is offering a production-linked incentive (PLI) that involves cash worth 4% to 6% of additional sales of goods made locally over five years, starting from 2019-2020,

The smartphone industry has become an essential part of the government's ‘Make In India’ drive, which wants to make the country an export hub. Global players such as Samsung, Foxconn and Wistron, which both supply Apple, have already ramped up local production, attracted by India’s huge domestic market of 1.3 billion people.

The plan also includes schemes to drive up production of components and create manufacturing clusters with pre-built factory sheds and common facilities for companies to move in immediately.

The plan comes at a time when a growing number of companies are looking for new manufacturing sites that are outside of China, where the coronavirus pandemic seriously disrupted global supply chains.

India is well placed offering a plentiful supply of cheap labour and with more than 1 billion mobile connections, but far fewer smartphones, it is also seen as a huge potential market by manufacturers.

Author
Neil Tyler

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