Companies must invest at least ₹250 crore in the first year and maintain similar investments over the following three years to be eligible for benefits.
Domestic electronics company Dixon Technologies along with Apple’s three Indian contract manufacturers—Foxconn (Hon Hai), Wistron (now owned by Tata Group), and Pegatron—and Samsung from South Korea, are set to receive over ₹4,400 crore in incentives for achieving targets in FY23 through India’s Production-Linked Incentive (PLI) scheme for smartphones.
Due to some selected companies not meeting production targets, the originally planned outlay of ₹6,504 crore for FY24 will not be fully utilised. Companies exceeding targets may claim additional benefits from the unclaimed amount.
Rising Star (Bharat FIH), a contract manufacturer for Xiaomi, has failed to meet the target since the inception of the PLI scheme in FY21 and is likely to continue this trend in FY23. Indian companies like Lava and Optiemus Electronics, which have not met PLI targets, are unlikely to receive incentives.
The disbursement in FY24 is expected to be the highest yet under the scheme, as four out of five global firms met the targets in FY23. Up to now, the government has allocated approximately ₹2,500 crore under the scheme, with Samsung and Apple’s contract manufacturers being major beneficiaries.
The overall financial outlay for the scheme was reduced to ₹38,601 crore, with the difference used for the IT hardware scheme. Companies must invest at least ₹250 crore in the first year and maintain similar investments over the following three years to be eligible for benefits.
Since its inception, the scheme underwent revisions due to most beneficiaries failing to meet targets in the first year, except for Samsung. The scheme’s duration was extended to six years, allowing companies to choose any five years for claiming benefits. Incentives will be settled by FY27.
Samsung has filed claims for meeting targets for the third year after failing in the second year. Mobile phone exports have reached $10.5 billion from April to December 2023, with the electronics sector jumping to the fifth rank in export categories since the scheme’s launch in 2021.
The India Cellular and Electronics Association (ICEA) predicts mobile phone exports to reach $14-15 billion by the end of the fiscal year. The smartphone PLI scheme offers graded incentives, starting at 6% of sales for the first two years and decreasing over time.
