2 min read.Updated: 18 Dec 2020, 11:10 PM ISTIshita Guha
Prasad said the government has set a target of manufacturing one billion mobile phones, 50 million televisions and 50 million hardware devices such as laptops and tablets by 2025
Domestic manufacturing of electronic gadgets, including mobile phones and components, televisions, and laptops, is expected to contribute one-fifth to India’s economy by 2025, communications, electronics and information technology (IT) minister Ravi Shankar Prasad said on Friday.
“…You talked of $5 trillion economy, by proper scaling of electronics manufacturing, we will be able to contribute $1 trillion by this manufacturing alone to the country’s kitty. This is what I am aiming for," said Prasad at an event organised by industry body Assocham.
Prasad said the government has set a target of manufacturing one billion mobile phones, 50 million televisions and 50 million hardware devices such as laptops and tablets by 2025. He said India must become the top manufacturing destination for electronic devices in the world.
On Monday, Prasad said the government plans to extend the production-linked incentive (PLI) scheme to domestic manufacturing of laptops and tablets, following the success of a scheme to locally produce mobile phones and their components.
Sixteen global and domestic mobile and electronic component makers including Samsung, Foxconn and Bhagwati Products—the maker of Micromax phones—will benfit from the Centre’s PLI scheme that was launched in April to boost local manufacturing.
The other eligible international phone makers are Rising Star, Wistron and Pegatron. Except for Samsung, other foreign companies are contract manufacturers for Apple Inc. Samsung and Apple together account for nearly 60% of global revenue for mobiles.
The need for local manufacturing arose after the pandemic, which showed India’s huge dependency on imported goods. Tensions between India and China that started in May spurred local manufacturing of goods and applications. The government so far has banned over 200 Chinese applications due to national security concerns.
On Friday, Prasad said India will not “compromise on data sovereignty". He said data of Indians can be procured with consent and used for refining.
“I am very clear that India should not compromise on its data sovereignty because data as an economy is emerging globally, and there is going to be big competition for monopolising data. India will not compromise on data sovereignty," Prasad said.
Under the PLI scheme for mobile phones, the government will give 4-6% incentive to eligible electronic companies on incremental sales of manufactured goods—mobile phones and electronic components such as printed circuit boards and sensors, among others—for five years. The base year is 2019-20 and the incentives are applicable from 1 August.
Over five years, the scheme is expected to result in production worth ₹10.5 trillion, out of which more than 60% will be contributed by exports. The scheme will bring additional investment to the tune of ₹11,000 crore and create 300,000 direct jobs.
Incentives for local production of goods have been extended to other sectors as well. The Union cabinet in November approved PLI scheme for 10 sectors, including telecom equipment manufacturing which received an outlay of ₹12,195 crore.
India is one of the largest telecom markets in the world and mostly depends on global firms—Sweden’s Ericsson, Finland’s Nokia, South Korea-based Samsung, and ZTE and Huawei from China—for its equipment requirements.