The aim is that the country should develop capacity for manufacturing around 25 per cent of the global output
As the government ramps up its efforts to make the country self-reliant and turning it into a manufacturing hub for electronics to discourage imports from China, the Ministry of Electronics and IT (MeitY) is reportedly planning to launch a production-linked incentive (PLI) scheme for wearables next year.
As per a report by Financial Express, the ministry is looking to notify the scheme by 1 April 2022. Notably, MeitY has already launched two PLI schemes- one for smartphones and another for IT hardware.
The report said that the government plans to come up with a PLI scheme for wearable/hearable devices in the coming months.
The aim is that the country should develop capacity for manufacturing around 25 per cent of the global output.
The wearables segment is growing at an exponential rate. The size of the global market is $25-$30 billion.
But over the next four-five years, the market for wearables/hearables will grow to $80-$85 billion and India should target to manufacture $15-$20 billion worth of products by then, added the report while citing an official.
“We are holding consultations with the industry regarding the PLI scheme. The outlay for the scheme will be decided based on the level of manufacturing commitment by the companies. We want to achieve manufacturing to the tune of $15-$20 billion for the next four-five years,” said the official.
The industry is demanding incentives in the range of 7 percent to 8 per cent, given the fact that the segment is quite nascent and it would take some time for the ecosystem to mature.
The market for wearable and hearables electronics is led by the supply chain in US and China. With India having imposed an import duty of 20 percent on the segment, manufacturing in India really offers a lucrative chance for the companies in the segment which could in turn help shift the supply chain here.
Currently, the market for wearables is dominated by Apple, with Apple watch and Airpods enjoying the major share. In India, many local brands have emerged in the segment like Boat, Noise etc.
