Connect with us

Headlines of the Day

PLI scheme hugely successful, mobile phones up 110%, Apple & Samsung dominate

At a time when exports in many sectors are either sliding or at best remaining stable, smartphone shipments from India crossed the Rs 50,000-crore mark during April-November 2022, up 110% compared to the same period last year. This is also 10% higher from Rs 45,000 crore registered during the entire FY22.

The main contributors to this massive growth are Apple contract manufacturers – Foxconn, Pegatron (both located in Tamil Nadu) and Wistron (located in Karnataka) – and Samsung.

Nearly 40% of the Rs 50,000 crore worth of smartphones exported from India are iPhones, which Apple exports to Europe, West Asia and Asian countries, except China.

Samsung and a range of small exporters, most of which are Indian device makers, contributed the remaining 60%.

Apple’s vendors and Samsung are participants in the smartphone PLI scheme announced by the government in April 2020.

Samsung, which has been manufacturing phones in India for over a decade now, was by far the leader in smartphone production and exports till recently. However, in November, Apple overtook Samsung to clock exports worth Rs 4,300 crore – the highest the company has achieved since it entered the PLI scheme with two of its three vendors in August 2021.

Industry analysts said that the impact of the PLI scheme took about a year to take shape. While exports hovered between $440 and $700 million per month between April-August this year, the average exports since September are nearly $1 billion per month.

Smartphones are also driving up the position of electronics as the leading contributor to exports from India. Till 2018, electronics was ranked as India’s 10th largest export segment, and now it has moved up to the sixth position. It is highly likely that electronics could be in the top five export segments from India at the end of FY23.

“Thanks to the smartphone PLI scheme, we have exceeded expectations in mobile exports. As we transition from import substitution to exports, especially at this scale, India’s competitiveness, especially on tariffs, becomes critical. We also need a robust component PLI scheme to expand the local ecosystem,” Pankaj Mohindroo, chairman, India Cellular and Electronics Association (ICEA), told FE.

The ramp up of mobile phone exports is seen as a major success of the government’s flagship smartphone PLI scheme. The scheme propelled the shifting of Apple’s supply chains – one of the world’s largest and most complicated – in the middle of the pandemic. Industry experts say that the focus will now turn to rapidly increasing value addition through expansion of the components ecosystem by adding Indian companies to the global supply chain.

The government has launched 14 PLI schemes since April 2020. Most of them came into effect from 2021, and some from 2022. In the telecom space, the government launched three schemes – large scale electronics manufacturing (primarily smartphones), telecom and networking products, and IT hardware. Of the three schemes, the smartphone PLI scheme has been the most successful. In fact, it is currently the most successful scheme across all 14 PLI schemes, and also the largest.

The 14 PLI schemes will attract an incentive of Rs 2.4 trillion, with investments of Rs 2.54 trillion. The expected incremental output over the next 5-6 years would be of Rs 28.15 trillion. Financial Express

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2022 Communications Today

error: Content is protected !!