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PLI scheme seems to be falling apart for cellphone makers

Handset manufacturers in India may miss their production-linked incentive targets for the second year in a row as the ongoing Covid-19 pandemic is likely to lop three months of output, executives said. The companies are already looking at reducing hiring target for 2021 by a fifth, with production shutting or scaled-down as thousands of migrant workers head to their hometowns and villages after lockdowns and restrictions were imposed in many states. The incentive scheme was a washout in FY21, its first year, after only one of the 16 companies achieved the stipulated targets due to delays in manufacturing expansion caused by Covid-19.

Each global handset company had a production target of Rs 4,000 crore in FY21, which was to be achieved in eight months. “ForFY22, this target was doubled to Rs 8,000 crore, but we will again lose at least three months due to the second wave,” said a senior executive of a handset maker that missed the first year’s targets. “The scheme is almost falling apart without any confidence measures taken by the government.” The India Cellular Electronics Association, which represents Apple iPhone makers Foxconn and Wistron, and others including Lava, Bhagwati, UTL and Optiemus, had asked the government to consider FY21 as a zero year for companies to expand capacity and to ease target timelines. Business Mayor

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