PLI will move the giant wheel: Lava International CMD Hari Om Rai

NEW DELHI: The Indian government’s new Production-Linked Incentive Scheme for Large Scale Electronics Manufacturing (PLI) is designed to propel the business of Indian mobile phone assembly to the next level. The $5.5-billion scheme is expected to help companies such as Apple expand operations in the country while encouraging smaller domestic manufacturers to scale up. One of the beneficiaries is Indian phone maker Lava International Limited. Hari Om Rai, chairman and managing director of the company told Mint that PLI would eventually get the wheels rolling on a large electronics manufacturing ecosystem that every player can feed off. Excerpts.

Why do you think India stands a chance when it comes to electronics manufacturing?

There is a geopolitical thing that is emerging. Second, China is growing in per capita income. So companies are looking at an alternative destination. India has a large population; it is a big market; we have IT-related strengths. India is potentially a very strong destination to replace China or at least become the second destination if not replace China completely. It is an opportune time for India to position herself as the next manufacturing hub for electronics.

What is the importance of the PLI scheme?

The PLI scheme is an input to the target we have in the National Policy on Electronics (NPE 2019). It opens up the potential to build a sprawling ecosystem in India of mobile manufacturing, design. Mobile is at the heart of every single electronics — display, battery, PCB, assembly, industrial and mechanical design, hardware, software. It is the most complicated piece of electronics. It will bring not only mobiles, but the electronics ecosystem to India. The ecosystem will allow local companies to grow and develop. In every country, iconic companies have developed because of ecosystems.

How would companies such as Lava benefit when Apple expands and establishes an ecosystem in India?

PLI will move the giant wheel. First is the end product production. When you start manufacturing the end product in very large quantities, you would start developing a component ecosystem around that because that is the most efficient way of doing it. Once you start manufacturing a PCB, a display, a battery, camera modules, speakers etc., people start getting those skills. Our per capita is about $2000 as compared to China’s $10,000 or Korea’s $32,000. The moment we acquire skills, at lower per capita, our production output is going to be highly competitive. Foreign companies who come will get the advantage of India. Domestic companies even more.

Can the disbursement process in PLI be improved?

Everything can be improved. It’s a process. The government is very receptive. It would be easier if you don’t have to follow-through with the government for such things. If everything can be done electronically with less human intervention — all those things can be built. But some people do the wrong things, try to bypass the system. The government has no option but to mistrust them. It’s a process. /