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Business News/ Companies / People/  PLI will move wheels of electronics mfg: Rai

PLI will move wheels of electronics mfg: Rai

It (production-linked incentive) opens up the potential to build a sprawling ecosystem in India of mobile manufacturing and design, says Hari Om Rai, chairman and MD, Lava International

Hari Om Rai, chairman and MD, Lava International.Premium
Hari Om Rai, chairman and MD, Lava International.

The government’s new production-linked incentive (PLI) scheme for large-scale electronics manufacturing is designed to propel the Indian mobile phone assembly segment to the next level. The $5.5-billion scheme is expected to help even tech giants, such as Apple, to expand operations in India, while encouraging domestic manufacturers to scale up. A key beneficiary will be homegrown phonemaker Lava International Ltd, whose chairman and managing director Hari Om Rai said in an interview that the PLI scheme will eventually get the wheels rolling on a large electronics manufacturing ecosystem that every player can feed off. Edited excerpts:

Why do you think India stands a chance in electronics manufacturing?

First, a geopolitical situation 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 the second destination after China. It is an opportune time for India to position herself as the next manufacturing hub for electronics.

Why is the production-linked incentive scheme important?

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 and design. Mobile is at the heart of every single electronics—display, battery, printed circuit board (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 the ecosystems.

How will 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 will start developing a component ecosystem around that because that is the most efficient way of doing it. Once you start manufacturing a printed circuit board, a display, a battery, camera modules, speakers, etc., people start getting those skills.

Our per capita is about $2,000, compared to China’s $10,000 or (South) 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. Domestic companies even more.

Can the disbursement process in production-linked incentive be improved?

Everything can be improved. It’s a process. The central 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.

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Published: 02 Nov 2020, 08:00 AM IST
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