Apple, Samsung Could Make In India Smartphones Worth Over ?37,000 Crore This Year

Smartphone makers Apple and Samsung are expected to make phones worth $5 billion (over Rs 37,000) crores in the FY2022 under the government¡¯s PLI scheme, going past the target of 50 percent set by the central government, according to government officials and industry executives.

Apple Insider

Also Read: India Passes Rs 7,350 Crore PLI To Boost Make In India, Create Lakhs Of Jobs

As reported first by ET, out of the $5 billion, mobile exports will contribute around $2 billion. Samsung and Apple¡¯s contract manufacturers in India -- Pegatron, Foxconn¡¯s Hon Hai and Wistron, as well as Foxconn unit Rising Star were the five applicants who were picked under the PLI scheme for manufacturing smartphones in the global manufacturing segment.

As per the government official in a conversation with ET, the target under the scheme for FY2022 was around $3.2 billion for qualifying applicants. They claim that only three companies are eligible to avail the incentives as Bharat FIH and Pegatron haven¡¯t yet started producing phones in this segment.

Apple¡¯s second-largest global manufacturer after Foxconn, Pegatron, is expected to commence manufacturing in India in the coming months. Bharat FIH, on the other hand, is only making smartphones for Xiaomi. Since the company mostly makes phones of less than Rs 15,000 per unit, the company doesn't qualify for incentives under the PLI scheme.

Also Read: Made-In-India Smartphone Exports Jump To ?4,300 Crore In June 2021

Pankaj Mohindroo, chairman, India Cellular & Electronics Association (ICEA) said in a statement, "(The global manufacturers) are set to exceed their smartphone PLI targets this year. Our calculations show incremental production of about $5 billion by Samsung, Wistron and Hon Hai (Foxconn). Bharat FIH is also gearing up for the challenge in the next financial year (starting April 1), and Pegatron is expected to start production this year."

It is important to note that ICEA represents major smartphone brands and manufacturers such as Apple and Foxconn, but doesn¡¯t really include Samsung.

Reuters

The rate of incentive for the first two years would be six percent, five percent for the third and fourth year, and four percent for the fifth year. Upon companies hitting the targets, the government will pay the percentage of production cost back to the company as an incentive.

Also Read: Make In India: India Blocks Import Of Chinese Made Wireless Devices

The threshold is Rs 4,000 crores for the first year, Rs 8,000 crores in the second, Rs 15,000 crores in the third, Rs 20,000 crores in the fourth and Rs 25,000 crore in the fifth year.

Samsung however is availing the incentives for the second year. This indicates that it will have to make phones worth Rs 8,000 crores in the Rs 15,000 and above handset category. For Apple, however, it's the first year where they¡¯ll be expected to manufacture phones worth Rs 4,000 crores (each manufacturer).

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