Connect with us

Headlines of the Day

With very few manufacturers qualifying, mobile phones’ PLI scheme needs modification

India’s production linked incentive (PLI) scheme for mobile phones ‘choked’ mobile production growth because very few companies qualified for the incentives, said Josh Foulger, president, electronics, Zetwerk.

Foulger suggested that a PLI 2.0 for mobile phones should be modelled on the revamped PLI for IT hardware so that incentives are linked to meet the challenges of low localisation in the current scheme.

An electronics veteran, Foulger is the former managing director of Foxconn company Bharat FIH Ltd (set up to assemble non-Apple phones).
Bharat FIH failed to receive incentives as it did not meet the required criteria, despite being eligible for the mobile PLI.

He is also a member of the task force set up by the government to achieve the $300 billion electronics export target by FY26.

“PLI has been a choke for the growth of mobile production in India and I am sure the government is aware of that. Very few companies qualified and, if you really look at it, except for this north American company, who has really added jobs? However, I think this will get remedied hopefully,” said Foulger.

He commented on the low localisation in mobile devices. “We as an industry have been trying to crack it for the last 10 years but nobody has succeeded. The phased manufacturing programme was the only thing from a policy front which got localisation started. The mobile phone PLI did not support it. It was only for EMS players,” he said.

The solution, he said, is for the government to change the mobile phone PLI into something which has value addition as a target. As for rival Vietnam, Foulger believes its electronics export boom is short term.

“Vietnam is a small country. It’s not a market but a manufacturing source and it is fast running out of people like technicians and above. At higher levels you see Japanese, Koreans and Taiwanese running the operations. India is a full spectrum employer. We have all the talent required.”

He argues that Vietnam’s only advantage is proximity to China with whom it has a land border which opened for trade after the 1979 war. “But that advantage is a band aid for global supply chains. India is the only full spectrum replacement,” he said.

Zetwerk is an EMS start-up which is investing Rs 1,000 crore in the near future to build capacity. Foulger says the company is currently assembling 1.5 million-2 million phones a month which accounts for 10 per cent of the overall market share of phones.

It has also built a large plant in Manesar to produce 2.4 million TV sets which is 15-20 per cent of the country’s overall capacity.

Asked how Zetwerk will be different in TVs from its other EMS competitors, Foulger replied that Zetwerk has chosen to set up a large factory in north India while most of its competitors have plants in the south. Since 30 per cent of TV sales happen in the north, it has an edge in serving this market.

He is also pushing for a PLI for TV, for both backward and forward integration as well as exports.

Zetwerk has already put in place an export strategy for mobiles and TVs that is focused on Africa and the Middle East. “We are also looking at friendshoring and are talking to some US customers,” he said. Business Standard

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2024 Communications Today

error: Content is protected !!