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New Delhi: The Indian government’s production-linked incentive (PLI) scheme is bringing in big money into India as companies look to add local manufacturing capacities on the back of the scheme. According to a report by Reuters, three suppliers for Apple -- namely Foxconn, Wistron and Pegatron -- have committed $900 million in India over 5 years.

The three manufacturers plan to invest Rs. 4,000 crore, Rs. 1,300 crore and Rs. 1,200 crore in the country, respectively, said the report. According to two industry executives, the investments are being made to add capacities and ramp up domestic production of mobile phones for Apple and other brands.

Foxconn and Wistron already make smartphones for Apple, while Pegatron has recently set up a local entity in India to kick start its operations here, according to filings with the registrar of companies.

Apple has been moving parts of its manufacturing operations to India through these firms. Foxconn currently makes the iPhone 11 in its Chennai factory, while Apple had confirmed earlier that the 2020 version of the iPhone SE is also made in India now.

Foxconn, Wistron and Pegatron were amongst 22 companies which had applied for the government’s PLI scheme. The scheme offers a 4% to 6% incentive for manufacturing mobile and electronic devices in India, with foreign manufacturers eligible for the scheme only for devices with invoice values over 15,000. Indian firms like Lava, Dixon and Padget Electronics have also been building capacities to take advantage of the scheme.

The PLI scheme is part of the government’s ambitious ‘Atmanirbhar Bharat’ plan that aims to make the country self-sufficient in manufacturing of key items. Mobile and electronic components are amongst the biggest non-oil import in India besides gold.

According to an announcement from the Ministry of Electronics and Information Technology (MeitY) earlier, foreign manufacturers had proposed production worth over 9,00,000 crore, while domestic manufacturers had proposed production worth about 2,00,000 crore. Companies that applied under the specified electronic components segment had proposed production worth over 45,000 crore as well.

The electronics manufacturing industry in India grew to 4,58,000 in 2018 from 1,90,366 crore in 2014, according to government data.

IT Minister Ravi Shankar Prasad had said that the country’s exports grew by 38% year-over-year between 2018 and 2019. A strategy document submitted by the India Cellular and Electronics Association (ICEA) to the MeitY in June this year said India can achieve $100 billion in mobile phones and nearly $40 billion in component exports by 2025.

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