IT hardware factories remain shut with states cancelling, delaying permits

IT hardware factories, including mobile phone manufacturing units, in several states remained shut as state governments have either withdrawn permission or have not responded to requests of the companies, an industry body said on Monday.

The Home Ministry has allowed operation of IT hardware, manufacturing and other industrial establishments with access control in special economic zones and export oriented units in industrial estates and townships from April 20 with certain restrictions.

Electronics manufacturers’ industry body ELCINA said that only Maharashtra, Rajasthan and Kerala have granted permission for resuming operations in select areas and many states have denied permits. “Andhra Pradesh and Odisha have clarified no factory will be opened before May 3.

Most of the states have not allowed manufacturing operations. The UP government withdrew permission on Sunday,” ELCINA President and Sahasra Group of companies Chairman Amrit Manwani said.

Many mobile phone and component factories including Vivo, Oppo, Lava International etc are located in Gautam Buddha Nagar in Uttar Pradesh. “We have plants located in Uttarakhand, UP and Tirupati.

We are awaiting permission from the respective state governments but we can resume operations if our component suppliers are also allowed to start their operations. Some of them are located near Chennai. Unless operations of the complete supply chain are restored, manufacturing of TV, washing machines, and mobile phones will not start,” Dixon Technologies Executive Chairman, Sunil Vachani said.

Mobile phone companies have, however, made arrangements to resume partial operations at around 25 per cent production capacity by the end of this month and scale up to full capacity by June-end if sales are allowed in the country.

The home ministry on Sunday changed its earlier decision and disallowed sale of non-essential items through e-commerce platforms after opposition from political parties and traders. This has an impact on sales of mobile phones also as it does not fall under essential categories as of now.

Senior executives of mobile phone companies in India are hopeful that the government may include mobile devices in the essential item category to support work from home, education, access to emergency service online during the lockdown.

The industry body in a submission to the Ministry of Electronics and IT has shared a full protection plan from the coronavirus infection when they resume operations. This includes health monitoring of employees, personal protective equipment for personnel at important points, gloves and masks for employees, entry through air shower sanitisation system, sitting in zig-zag manner and no assembly of people in groups, among others.

In the plan, the industry has given a timeline to operationalise 25 per cent of the total capacity by April-end and 100 per cent by June-end. The mobile phone industry is estimated to have faced losses of around Rs 15,000 crore during the first phase of lockdown which started on March 24 and was to end on April 14.

Due to rise in cases of the coronavirus infection, the government further extended lockdown till May 3. Leading mobile phone companies Xiaomi and Vivo said they are evaluating the new government order and complying with all the rules. Realme had announced the launch of new smartphone Narzo series on April 21 but has deferred the decision following the revised government order.

Xiaomi also has deferred order booking for the mobile phones. According to industry sources, mobile phone companies will look to meet export requirements, which are around 12 per cent of the total production done in India, if they get permits from state governments.

In 2019-20, mobile phone players in India exported devices worth about Rs 25,000 crore and the total production is estimated to have crossed Rs 2 lakh crore.

―Deccan Herald