Make in India: Dell, HP, Foxconn, and others in line for state aid in production
Tech giants Dell, HP, and Foxconn are among the companies applying for state aid to manufacture laptops in India under a $2.1bn financial incentive plan introduced by Indian Premier Narendra Modi
PremiumAmid central government's push to make a manufacturing hub for the world, its financial incentive plan to boost local production is receiving good response. Till now, some of the world's biggest firms like Dell Technologies Inc. , HP Inc. and Apple Inc. supplier Foxconn Technology Group, have applied for the scheme.
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Indian Premier Narendra Modi’s $2.1 billion financial incentive plan — a bid to boost local production of technology hardware such as laptops, personal computers, tablets and servers — has received an overwhelming industry response, Tech Minister Ashwini Vaishnaw said Wednesday.
Under the plan, firms are entitled to incentives and subsidy by sourcing locally produced components. As per the scheme, companies are entitled to cash back of almost 5% of factory prices of finished products.
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Under the plan some of 32 companies, including units of homegrown contract manufacturers like Optiemus Electronics Ltd. and Dixon Technologies India Ltd., had applied for the incentives before the application process closed at midnight on Aug. 30.
Recent launch of incentive scheme, is an effort to attain a success of incentives it achieved in 2020. During that year, the government's introduced to jump-start the local assembly of smartphones. Under this plan, Apple manufacturer, Foxconn, was able to increase 7% of its global iPhone output from India last financial year. Other than Apple, other global firms like, Wistron Corp, and Pegatron Corp also strengthened their presence in India.
Prime Minister Narendra Modi expects companies to make an incremental investment of 34.3 billion rupees ($294 million). The investment is expected to convert into an additional production output worth 3.35 trillion rupees under its sixth year plan.
“India is emerging as a very trusted supply chain partner and also a value chain partner because it has good capabilities in design," Vaishnaw said in New Delhi, reported Bloomberg. He also told that companies could begin the production under the plan as soon as early next year.
Apple yet to apply for MacBook laptops and iPad production in India
Apple has yet to apply for incentives to locally assemble its laptops and iPad tablets, reported Bloomberg citing officials.
All of the applicants might not win the approvals for the financial stimulus. The smartphone incentives have shown that such programs usually work well with a few companies that can increase production rapidly, and win bigger cash returns.
The IT hardware manufacturing drive also seeks to penalize companies if production lags behind the set thresholds, by deducting as much as 10% from the subsidies.
To push companies to begin local assembly of IT hardware, India announced plans to impose a new license requirement for tech imports starting Nov. 1, spanning everything from laptops and tablets to servers and components for data centers. US tech companies have protested the move.
(With inputs from Bloomberg)
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