Business & Investment

The latest PLI scheme!Mobile phone makers may not be able to meet production targets and seek incentive adjustments

Mobile phone makers, including Samsung and Apple vendors, may not be able to meet production targets for the current fiscal year under a production-linked incentive (PLI) scheme and are urging the government to roll over the scheme’s timeline. I will.

In October, the government cleared 16 proposals from domestic and international companies with an investment of Rs 11,000 under the PLI scheme to manufacture mobile phones worth Rs 10.5 over the next five years.

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These companies include Samsung and Rising Star, as well as iPhone maker Apple’s contract manufacturers Foxconn Hon Hai, Wistron, and Pegatron.

ICEA, a mobile device industry group of members such as Apple, Foxconn, Wistron, and Lava, sent Ajay Prakash Sawhney, a secretary to electronics and IT, a shortage of chips in the PLI scheme on December 24, coupled with a shortage of chips. I said. The constraints imposed by the COVID-19 pandemic.

“PLI applicants are working very hard and are doing everything they can to reach their goals. Many of them can complete it, but 2021-22. It cannot be completed by the early fiscal year of. It will be completed by March 2021. However, they skate on thin ice because many slips can occur in these unusual situations. “There is,” ICEA President Pankaji Mohindol said in a letter.

The India Cellular and Electronics Association (ICEA) is in the global market as Chinese technology giant Huawei has purchased a two-year stake in the component to avoid the negative impact of the U.S. ban from September 2020 on the company. He said there was a shortage of electronic chips.

“In some cases, we found that our suppliers cut supply to Indian companies by 97%,” Mohindru said.

According to the ICEA, international flight bans and other logistics issues have hit some companies’ operations four months before the PLI scheme begins, allowing applicants to negotiate, select and order all machinery and equipment. It took almost no time to procure and install. After they were given the scheme qualification letter on October 7th.

Trade associations have called on the government to adjust the timeline of incentives under the PLI scheme without compromising the five-year goals set under the PLI scheme.

ICEA rewards companies that meet their targets during the current fiscal year, regardless of whether they meet their 2020-21 incremental sales targets, and those who achieve their investment targets and basic production on incremental production. Proposed to give PLI.

“The 2020-21 shortening will be added to the incremental target to set an annual incremental target in either iE, 2021-22, or 2022-23 for the next two years, at the applicant’s option. There are cases, “said Mohindrew.

According to the ICEA, if a company achieves only an incremental target of 2,000 rupees for 4,000 rupees in the current fiscal year, the company pays 6% for 2,000 rupees and adds the remaining 2,000 rupees in 2010. You need to be able to. Or FY’23? Incentive.

“This guarantees that our five-year production target will not be compromised, so the spirit of PLI is not compromised,” says Mohindroo.

According to industry sources, Samsung has not urged the government to adjust the scheme because it is likely to reach its goal.

Samsung plans to produce 370 million rupees worth of mobile phones in India over the next five years. This includes the production of Rs 220 million worth of smartphones under this scheme, priced in excess of Rs 15,000 per smartphone.

The email query sent to Samsung did not elicit a response.

The latest PLI scheme!Mobile phone makers may not be able to meet production targets and seek incentive adjustments The latest PLI scheme!Mobile phone makers may not be able to meet production targets and seek incentive adjustments

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