A test for the PM’s industrial policy and tech investment push, Foxconn and Dixon urge India to release unclaimed PLI subsidies, citing record production.
Foxconn Technology Group and Dixon Technologies India Ltd., both suppliers to Apple Inc., are reportedly urging the Indian government to release billions of rupees in subsidies, claiming they are entitled to part of the unallocated funds under India’s production-linked incentive (PLI) programme.
According to the Economic Times, this scheme, aimed at boosting manufacturing, was allocated 410 billion rupees ($4.8 billion), but a portion remains unallocated due to some companies not meeting production targets.
Foxconn and Dixon have argued that, under the programme’s rules, they qualify for a share of the unused subsidies. Sources suggest that Foxconn could be eligible for up to 6 billion rupees, while Dixon could receive 1 billion rupees. The government is currently reviewing these claims. Both companies and India’s technology ministry have declined to comment.
The PLI scheme, launched by Prime Minister Narendra Modi, sets annual production targets for global and local electronics manufacturers, with specific caps. Any unclaimed subsidies, arising from firms falling short of their targets, are meant to be redistributed to those who exceed theirs.
Foxconn exceeded its 200-billion-rupee cap with 300 billion rupees in iPhone production for the 2022-23 fiscal year, while Dixon surpassed its 60 billion rupee cap with 80 billion rupees in the 2023-24 fiscal year.
Although, as per ET’s report, the amount in question is relatively small, the issue is significant as a test of Modi’s industrial policy, especially amid growing investments by companies like Apple and Samsung. The outcome may have broader implications as India seeks to attract more investments from tech giants, including Microsoft, in areas such as cloud computing and artificial intelligence.
The review also includes Dixon’s compliance with the programme’s criteria regarding new investments in Xiaomi’s smartphone production, as production has declined due to competition in the Indian market.
