Apple’s contract manufacturers Foxconn, Wistron and Pegatron have applied for funds from India’s $6.65 billion scheme to boost smartphone manufacturing.
The production-linked incentive (PLI) plan offers cash incentives on additional sales of devices made locally over five years, with 2019-2020 as the base year. India wants to become a global smartphone export hub like China.
Apple assembles some smartphones, including the iPhone 11, at Foxconn and Wistron’s plants in two southern Indian states.
Pegatron, one of Apple’s top suppliers, has yet to open a plant in India, but is in talks with various states to set up operations, Reuters reported.
Samsung Electronics has also applied for incentives under the plan, technology minister Ravi Shankar Prasad told a news conference.
Samsung has a mobile phone manufacturing plant on the outskirts of New Delhi. It also exports devices from the factory.
Lava, which once assembled models for China’s Lenovo, was among the Indian companies which have sought funds, Prasad added.
A total of 22 firms have applied to the scheme, which the government expects will generate smartphone production worth $154 billion and create 300,000 direct jobs over five years.
Smartphone production has emerged as a bright spot in India’s economy, thanks to Prime Minister Narendra Modi’s emphasis on local manufacturing in a bid to create jobs.
With more than 1 billion wireless subscribers, of which about a third rely on basic handsets, India provides huge growth prospects for smartphone makers, as well as offering cheap labour.
Foxconn plans to invest up to $1 billion to expand a factory in Tamil Nadu state where it assembles iPhones, Reuters reported last month.
Meanwhile, Samsung Electronics will halt operations of its last computer factory in China, the South Korean tech giant said on Saturday, the latest manufacturer to shift production from the world’s second-biggest economy.
Companies are rethinking their production and supply chains amid rising Chinese labour costs, a U.S.-China trade war and the blow from the COVID-19 pandemic.
Around half the 1,700 employees on contract at Samsung Electronics Suzhou Computer will be affected, excluding those involved in research and development, the South China Morning Post reported on Friday, citing a notice to Samsung staff.
The factory shipped $4.3 billion worth of goods out of China in 2012, a figure that had sunk to $1 billion by 2018.
Samsung shut its last smartphone factory in China last year. Its remaining facilities include two semiconductor manufacturing sites in Suzhou and Xi’an.
Under Mobile Phone (Domestic Companies) Segment, Indian companies including Lava, Dixon Technologies, Bhagwati (Micromax), Padget Electronics, Sojo Manufacturing Services and Optiemus Electronics have applied, the government informed.
Ten companies have filed applications under the Specified Electronic Components Segment which include AT&S, Ascent Circuits, Visicon, Walsin, Sahasra, Vitesco and Neolync.
“The scheme will generate around three lakh direct employment opportunities in next five years along with creation of additional indirect employment of nearly three times the direct employment,” Prasad said.
Domestic value addition is expected to grow from 15-20 percent to 35-40 percent in case of mobile phones and 45-50 percent for electronic components.