According to a credible report, Apple Inc. and Samsung, along with their contract manufacturers in India, are expected to receive more than Rs 4,400 crore in incentives for meeting production targets under the government's production-linked incentive (PLI) scheme for smartphones in the financial year 2023. Additionally, Dixon Technologies, a domestic electronics business, Foxconn (Hon Hai), Pegatron, Samsung, Wistron (now owned by Tata Group), and Pegatron are among the benefactors.
Although a budget of Rs 6,504 crore was initially planned for the fiscal year 2024, not all of the companies who were chosen for the program were able to meet the specified output targets. As a result, not the entire sum will be used.
Optiemus Electronics, a Chinese smartphone contract maker, and Rising Star (Bharat FIH), an Indian company, were among the companies that could not reach their PLI targets. Since four of the five multinational companies achieved their goals in FY23, FY24 will see the largest program payout yet.
In accordance with the policy, the government has released about Rs 2,500 crore, of which Rs 500 crore was given to Samsung for exceeding expectations in the first year and Rs 1,700–2,000 crore to the three contract manufacturers of Dixon and Apple.
PLI plans for mobile devices
Companies who meet production targets in the first year are eligible for incentives under the PLI plan for smartphones. Those that exceed the goals are eligible to receive additional advantages from the money that wasn't used by businesses that didn't fulfill their goals.
Cashback in the form of graded incentives is offered; for the first two years, there is a 6% rebate on incremental sales; for the third and fourth years, there is a 5% rebate, and for the fifth year, there is a 4% reimbursement.
Contract manufacturers for businesses such as Samsung and Apple are required to invest a minimum of Rs 250 crore during the scheme's first year in order to be eligible for these rewards. Every year after that calls for an equal investment. Production-wise, multinational corporations must produce additional goods—mobile phones priced at Rs 15,000 and above—totaling Rs 4,000 crore, Rs 8,000 crore, Rs 15,000 crore, Rs 25,000 crore, and Rs 50,000 crore in the scheme's last year.
With the exception of Samsung, the majority of beneficiaries failed to reach targets in the first year of the PLI plan, which led to changes since its beginning in the financial year 2021.
India's electronics industry has benefited greatly from the PLI scheme; from April to December 2023, mobile phone exports totaled $10.5 billion.
