PLI Scheme for Manufacturing Mobile Phones and Related Components in India

The PLI (Production Linked Incentive) scheme for mobile manufacturing was launched by the Indian government with the aim of boosting the production of mobile phones and related components in India. Overall, the PLI scheme for mobile phones and related components is expected to boost the domestic mobile phone manufacturing industry with the help of the financial incentives to manufacturers, create job opportunities, promote innovation and research and development in this sector. The Ministry of Electronics and Information Technology  is the nodal agency responsible for the implementation of the scheme.
 

Some Key Features of the Scheme are:

• The government has allocated a budget of INR 40,000 crores for the PLI scheme for mobile manufacturing combined with greater domestic value addition through catalysing manufacturing of electronic components such as active semiconductor components, passive components, PCB assemblies etc. over a period of five years.
• The scheme encourages eligible companies to upgrade their technology and production capabilities to improve the quality and competitiveness of their products.
• The incentives range from 4% to 6% of the incremental sales value for a period of five years, and are disbursed on an annual basis.

 

Calculation of Incentives:

The incentives are calculated based on the incremental sales of mobile phones manufactured in India by eligible companies. The incremental sales are calculated by comparing the sales of mobile phones manufactured in India by eligible companies in a particular year with the sales of mobile phones manufactured in India by the same companies in the previous year.
 
The incentives are then calculated based on a percentage of the incremental sales value, ranging from 4% to 6%, depending on the category of mobile phones manufactured. The incentives are disbursed annually over a period of five years, subject to the eligible companies meeting the performance targets set by the government.
 

Eligibility:

• The company must be a registered entity in India and must have a manufacturing facility in the country for mobile phones or components. It is important for the facility to be operational and producing mobile phones or components before the date of application.
• The company must comply with the minimum sales criteria specified under the scheme, which is Rs. 5000 crores for mobile phones and Rs. 600 crores for components in a year.
• The company must meet the export criteria specified under the scheme, which is a minimum of 60% of the total production value for mobile phones and 30% of the total production value for components.

 
With eligible companies competing to receive incentives, the PLI scheme is fair and benefits the most deserving companies, while also promoting competitiveness and innovation in the industry.
 

Overall Challenges Involved:

While a recipient may enjoy several benefits and incentives of the PLI scheme, there are also some challenges that every manufacturer should be aware of.

• Companies need to meet the production targets and simultaneously boost exports as specified under the scheme to be eligible for the incentives. This could be a challenge for companies that are new to the sector or are expanding their operations.
• The PLI scheme for mobile phones and its components is a competitive process, and not all applications may be approved. Companies should be prepared for competition from other manufacturers and should ensure that their application is complete, accurate, and meets all the eligibility criteria.
• Companies need to invest in latest technology and equipment to improve productivity and quality to be competitive in the global market. However, this can be a significant cost for companies, especially for those that are new to the industry.
• Companies need to comply with various regulatory requirements, such as environmental norms, labour laws, and tax regulations, to be eligible for the incentives.

 
The PLI scheme for manufacturing mobile phones and related components has received a positive response from Indian companies, with several leading players in the industry applying for and receiving approvals under the scheme. The scheme is expected to create new job opportunities, attract investment, and boost India's position in the global mobile manufacturing and export market.
 
To learn more about how to pitch for the PLI scheme, the process of application, disbursement of incentives, the key obligations of the recipient- CLICK HERE.