Extension of large scale electronics PLI scheme to help companies achieve target: Industry

Mobile device makers on Monday said the extension of production linked incentive (PLI) scheme for large-scale electronics manufacturing and flexibility in base year will help companies achieve their target.

Finance Minister Nirmala Sitharaman announced an extension of the tenure of the production-linked incentive (PLI) scheme for large-scale electronics manufacturing with a focus on mobile phones by a year until 2025-26.

The base year of the scheme 2019-20 remains the same, but the companies will have the option to choose their five-year period either from the base year or the year 2020-21 for calculation of the incentives under the scheme.

"We are delighted that the PLI scheme change in the base year has been extended by the Government of India in the light of a challenging year for all companies due to the pandemic situation."

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"This thoughtful change will help us to accelerate our business and thereby achieve the qualifying revenue under the PLI Scheme," Foxconn group firm Rising Stars Mobile country head and managing director Josh Foulger said in a statement.

A total of 16 companies have committed a total investment of Rs 11,000 crore under the PLI scheme to manufacture mobile phones worth Rs 10.5 lakh crore over the next five years.

"We are grateful to the government for having considered the industry's request in view of some of the problems faced due to the pandemic.

Optiemus is fully committed to working towards the Atmanirbhar Bharat initiatives of the Hon'ble Prime Minister and we are confident Optiemus will show positive results as a result of the PLI scheme," Optiemus Electronics managing director A Gururaj said.

The relief to the mobile phone makers follows their grievances around disruption in production activities due to the pandemic-related lockdowns, restrictions on the movement of personnel, delay in installation of relocated plant and machinery, and disruption in the supply chain of components.

Micromax director Rajesh Agrawal said the government's decision to extend the PLI scheme for mobile phone manufacturing by a year offers a much-needed respite to the manufacturing industry that is reeling under the impact of the pandemic.

"This is a welcome move and will allow for more flexibility wherein we can now choose the years for meeting our production targets. Overall, it is a forward-thinking decision by the government to re-think business and scalability in these uncertain times that reiterates the government's support for the manufacturing industry," Agrawal said.

The companies that are availing the scheme include iPhone maker Apple's contract manufacturers Foxconn Hon Hai, Wistron, and Pegatron, apart from Samsung and Rising Star.

Domestic companies whose proposals have been approved include Lava, Bhagwati (Micromax), Padget Electronics (Dixon Technologies), UTL Neolyncs, and Optiemus.

The eligible companies will get 4-6 percent incentives on incremental sales.