The IT Ministry, in consultation with the Finance Ministry, Commerce Ministry and the NITI Aayog, is considering a Rs 42,000 crore package for domestic manufacture of mobile phones and their components, The Times of India reported.
The production-linked incentive (PLI) would provide a benefit of 4-6 percent over five years (base year as FY20) to large contract manufacturers and domestic companies (both defined under 2017 FDI circular) on the incremental sale of locally manufactured devices billed above $200 (around Rs 14,000 ex-factory), the paper said.
“The total cost of the scheme is envisaged at Rs 41,795 crore and will be initially available on new applications for a period of three months,” a source told the paper, adding that it would be centrally-sponsored and not overlap with other sector-specific schemes.
Moneycontrol could not independently verify the report.
The beneficiaries would be international biggies such as Apple (iPhone), Foxconn, Flex, and Wistron (contractors), and Samsung (Note series, Galaxy S); and local players: Micromax, Karbonn, Lava and Intex. However, budget phone makers such as Oppo, Vivo and even some Samsung devices would miss out, as they bill below the $200 threshold, it noted.
The package is likely to be disbursed in tranches with close to Rs 4,030 crore planned to be disseminated in the first year, followed by Rs 6,395 crore in the second, Rs 8,760 crore in third, Rs 11,790 crore in the fourth year and Rs 10,820 crore in the fifth, the report said.
The aim is to make India an electronics and components manufacturing hub, bring it on par with competing nations like China and Vietnam, and cut India's import bill on such items, sources added.
It is envisaged that this would help create mobile phone and parts production worth Rs 8.2 lakh crore, generate Rs 5.8 lakh crore of exports and two lakh new jobs, besides earnings the exchequer Rs 4,782 crore from direct taxes.
While majority of funds will be for mobiles phone manufacture, associated components (surface-mounted technology or SMT, devices for semiconductor, printed circuit boards or PCB, and sensors and micro/nano-electronic components) and ATMP units (assembly, testing, marketing and packaging), which help build ecosystem for semiconductors, would also be covered.
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