Tata, Foxconn, Motherson anchor ₹27,166-crore mobile enclosure manufacturing push

New Delhi: India’s push to localise high-value electronics components—long dominated by Chinese suppliers—took a decisive step forward on Friday, as the government cleared 22 capital-intensive projects involving investments of ₹41,863 crore under the electronics components manufacturing scheme (ECMS).

The bulk of the approved amount — ₹27,166 crore — was earmarked for three projects dedicated to mobile enclosure manufacturing by Tata Electronics, Motherson Group — an auto-component giant marking its foray into electronics manufacturing — and Taiwanese major Foxconn’s India arm Yuzhan Technology, the ministry of electronics and IT (Meity) said at a conference to announce the investment approvals.

Mobile enclosures are the metal frames or casings on which all other components are mounted, and account for over 10% of a mobile phone’s bill of materials, making them a key source of value addition in the manufacturing chain.

S. Krishnan, secretary at Meity, said the decision to approve mobile phone enclosure manufacturing was aimed at boosting export opportunities and increasing the electronics industry’s contributions to India’s economy.

“With ECMS, we’re creating export capability in high-precision mobile enclosures, which is extremely significant. We’d emphasized that anything produced under this scheme has to be export-competitive in order for India to really reap the benefits of import substitution," Krishnan said. “That’s the only way ECMS makes sense. Now, the capacity that gets created in enclosures is going to be a major export-oriented project, as well as catering to India itself.”

Executives at the event to announce the investment said work on the local projects is already underway, and will start supplying to industries as early as the next fiscal year.

After Friday’s announcement, the Meity has approved a total of 46 projects under the ECMS, with cumulative investments reaching ₹54,567 crore. Earlier approvals came on 27 October for seven projects with investment of ₹5,532 crore, and on 17 November for 17 projects with investments of ₹7,172 crore.

Other projects approved on Friday

Beyond enclosures, approvals also spanned key upstream and adjacent components. Of the remaining 19 projects, nine are dedicated to printed circuit board (PCB) assembly and manufacturing with cumulative investments of ₹7,377 crore.

Other key projects include Dixon Technologies’ foray into camera module assembly with an investment of ₹550 crore.

Korean conglomerate Samsung’s local display manufacturing unit will invest ₹524 crore to assemble Oled displays for smartphones and televisions.

ATL Battery Technology, a wholly owned subsidiary of Apple supplier TDK Corp, is also setting up a lithium-ion battery cell manufacturing plant for consumer electronics, with a net investment of ₹2,922 crore.

Bullish on India

According to Meity, Foxconn’s project is expected to create 16,210 new jobs, while Tata’s plant will create 1,500 jobs. Motherson, through its wholly owned subsidiary Motherson Electronic Components, will employ 5,741 people at its plant to set up mobile enclosure manufacturing. Their respective individual investments were not broken down at the announcement.

Dinkar Malladi, resident director and vice-president at Yuzhan Technology India, said that the company’s entry into ECM was a major move by its parent Foxconn to diversify its supply chain. Foxconn is better known globally as one of the world’s largest contract manufacturers of mobile phones, and one of Apple’s biggest global partners.

“As far as components are concerned, this is the first time that a Foxconn Group entity has moved out of China,” Malladi said. “We’re excited to be here in a big way, and we’re excited to set up a lights-out factory with Industry 4.0 automation and local procurement. We’ll invest more in bringing our ecosystem to India.”

Saurabh Gupta, group chief financial officer of Dixon Technologies, told Mint earlier this week that the company will look to invest more in component manufacturing to increase value addition, as the company looks to manufacture 65 million smartphones — about 42% of India’s annual smartphone sales — this fiscal.

Samsung’s India chief, Jong Bum Park, had also told Mint on 23 December that the company is beginning to manufacture displays out of its Noida factory.