Foxconn, Wistron, Dixon lead the pack

It has been three years since the government launched the production-linked incentive (PLI) scheme to boost smartphone manufacturing in the country, and iPhone makers Foxconn and Wistron have become the first companies to register for claims as they have successfully met the incentive targets for FY23, The Hindu BusinessLine (HBL) has reported.

Foxconn met its production-related targets within the first nine months of the last fiscal year. Wistron and Dixon Technologies were the fastest to achieve incentive targets and file claims for the third round of PLI subsidies, industry sources were quoted in the report.

Jump in manufacturing

Foxconn and Wistron share the majority of iPhones manufactured in India. Earlier, Business Standard had reported that Foxconn Technology Group and Wistron Group exported around $1 billion of Apple’s popular iPhones from India. The feat was achieved in the first nine months of FY23.

Disruptions in the manufacturing facilities at Foxconn’s Hon Hai factory in China led to Foxconn planning more than Rs 4,000 crore investments in India. This was done to bolster Foxconn’s manufacturing capacity in India.

To avail incentives for the third year, the government mandated incremental sales of over Rs 15,000 crore (each) and a minimum investment of Rs 750 crore to enhance manufacturing infrastructure that year.

PLI benefits and Samsung

iPhone makers have increased their focus on the Indian markets at a time when the government is also providing an attractive scheme. The report quoted industry experts as saying that iPhone makers Wistron and Foxconn have received incentives for the first and second years of the PLI scheme.

On the other hand, Samsung, which also completed the PLI-mandated targets, has yet to receive its payment of around Rs 500–700 crore. The government has cleared the incentive payout for Samsung but has not yet paid the amount to the company. The payment will likely be released after a few checks by the PLI audit teams, the HBL report said.

What is the PLI Scheme?

Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing was announced on April 01, 2020, through a gazette notification. The scheme offers the manufacturers an incentive to boost domestic manufacturing. The government intended to attract large investments in mobile phone manufacturing and specified electronic components, including assembly, testing, marking and packaging (ATMP) units.

The scheme has drawn global manufacturers, including Samsung, Foxconn, Wistron, and Pegatron. Among these, Foxconn, Wistron and Pegatron are contract manufacturers for Apple. So far, Samsung and Apple have been leading local manufacturing and have met PLI-mandated targets. The government estimates that the scheme will pave the way for a total production of Rs 10.5 trillion. More than 60 per cent of this production is expected to be exported.

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