Cabinet clears new Rs 62,500 crore mobile manufacturing scheme, Indian-brand phones to get fresh push
The new scheme focuses on local sourcing to help domestic value addition, design and R&D by Indian brands.
The Union Cabinet has approved a Rs 62,500 crore mobile phone manufacturing scheme, as a follow on of the Production Linked Incentive (PLI) scheme for smartphone assembly, which helped India successfully localise mobile phone production. The scheme will be in force for a period of five years.
The PLI scheme was instrumental in attracting companies such as Apple to set up local production facilities through their contract manufacturing partners, and establishing smartphones as one of the country’s biggest export categories. Thanks to the scheme, India has managed to take local value addition in the sector to 24%, compared to China’s rate of 38%.
Under the fresh scheme, the government has placed a key focus on local sourcing to help domestic value addition, and design and R&D by Indian brands, along with incentives linked to export of smartphones, Union IT Minister Ashwini Vaishnaw said.
Along the lines of the sales-linked incentives under the PLI for smartphones, the fresh scheme provides incentive support on eligible sales for manufacturing of mobile phones in India at differentiated rates ranging from 2.25% to 5%.
The scheme will also provide additional incentive of up to 1.5% linked to domestic sourcing of key components/sub-assemblies. For building Indian brands, an additional incentive at the rate or 3% on eligible sales for design and R&D of the product.
The scheme targets to reach cumulative production of Rs 39 lakh crore during the tenure of the scheme, from Rs 22 lakh crore production achieved under the previous PLI scheme. The scheme has a target to generate 60,000 direct jobs in mobile manufacturing and other sectors. Under the PLI scheme for smartphones, nearly 2 lakh jobs were created.
Vaishnaw said that under the PLI scheme, over Rs 19,000 crore was disbursed as incentives, and the government collected direct taxes worth Rs 25,000 crore, and Rs 3 lakh crore in GST from the smartphone industry.
Investments under the previous scheme topped Rs 20,000 crore, exceeding the initial targets by three times. Smartphone production stood at Rs 11,61,581 crore, exceeding the target by 142%.
“Our vision is to have India’s share of global mobile phone production to 35-40%, and this policy will be a step towards that. The resulting scale will strengthen India’s position in global value chains and build technological know-how, advanced manufacturing processes, engineering capabilities, and supplier networks. These capabilities will extend beyond mobile phones and accelerate growth across the wider electronics industry,” said Pankaj Mohindroo, Chairman of tech industry body ICEA.
The Union Cabinet has approved a Rs 62,500 crore mobile phone manufacturing scheme, as a follow on of the Production Linked Incentive (PLI) scheme for smartphone assembly, which helped India successfully localise mobile phone production. The scheme will be in force for a period of five years.
The PLI scheme was instrumental in attracting companies such as Apple to set up local production facilities through their contract manufacturing partners, and establishing smartphones as one of the country’s biggest export categories. Thanks to the scheme, India has managed to take local value addition in the sector to 24%, compared to China’s rate of 38%.
Under the fresh scheme, the government has placed a key focus on local sourcing to help domestic value addition, and design and R&D by Indian brands, along with incentives linked to export of smartphones, Union IT Minister Ashwini Vaishnaw said.
Along the lines of the sales-linked incentives under the PLI for smartphones, the fresh scheme provides incentive support on eligible sales for manufacturing of mobile phones in India at differentiated rates ranging from 2.25% to 5%.
The scheme will also provide additional incentive of up to 1.5% linked to domestic sourcing of key components/sub-assemblies. For building Indian brands, an additional incentive at the rate or 3% on eligible sales for design and R&D of the product.
The scheme targets to reach cumulative production of Rs 39 lakh crore during the tenure of the scheme, from Rs 22 lakh crore production achieved under the previous PLI scheme. The scheme has a target to generate 60,000 direct jobs in mobile manufacturing and other sectors. Under the PLI scheme for smartphones, nearly 2 lakh jobs were created.
Vaishnaw said that under the PLI scheme, over Rs 19,000 crore was disbursed as incentives, and the government collected direct taxes worth Rs 25,000 crore, and Rs 3 lakh crore in GST from the smartphone industry.
Investments under the previous scheme topped Rs 20,000 crore, exceeding the initial targets by three times. Smartphone production stood at Rs 11,61,581 crore, exceeding the target by 142%.
“Our vision is to have India’s share of global mobile phone production to 35-40%, and this policy will be a step towards that. The resulting scale will strengthen India’s position in global value chains and build technological know-how, advanced manufacturing processes, engineering capabilities, and supplier networks. These capabilities will extend beyond mobile phones and accelerate growth across the wider electronics industry,” said Pankaj Mohindroo, Chairman of tech industry body ICEA.
