Indian Government extends mobile phone PLI scheme till 2025-26

The government on Monday extended the period of production-linked incentive (PLI) scheme for large-scale electronics manufacturing with a focus on mobile phones by a year until 2025-26.

Finance minister Nirmala Sitharaman on Monday announced a year’s extension to the production linked incentive (PLI) scheme for the electronics manufacturing sector. The scheme, which was launched for five years, between 2020-21 and 2024-25, will now be valid till 2025-26, offering a breather to the beleaguered manufacturers who had been impacted due to repeated lockdowns in the last one year.

“While manufacturers were earlier allowed to claim a six per cent incentive for incremental production during the first year, 2020-21, they will now have the option to choose 2021-22 as the first year of the scheme for similar benefits,” she said.

“Companies have been unable to meet incremental production conditions. Disruption in production activities due to pandemic related lockdown, restriction on movement of personnel, delay in installation of plant and machinery and disruption in supply chain of components,” said Sitharaman.

The Ministry of Electronics and IT has cleared 16 proposals from domestic and international companies entailing investment of Rs 11,000 crore under the production linked incentive (PLI) scheme to manufacture mobile phones worth Rs 10.5 lakh crore over the next five years.

The companies include iPhone maker Apple’s contract manufacturers Foxconn, Wistron and Pegatron, apart from Samsung and Rising Star.

Domestic companies whose proposals have been approved include Lava, Bhagwati (Micromax), Padget Electronics (Dixon Technologies), UTL Neolyncs and Optiemus. The eligible companies will get 4-6 per cent incentives on incremental sale of companies.

According to Pankaj Mohindroo, Chairman, India Cellular and Electronics Association, this extension would not only support the government’s efforts to establish India as an integral part of the Global Value Chain (GVC) in the electronics sector, it will also support developing Indian companies to tap the global and Indian markets through this sharply targeted production incentivisation scheme.

“It is a great win for India. This decision will enable the nation to become a global electronics manufacturing destination and also send the right message to global investors in the pandemic time. It shows that India’s governance is deeply compassionate, realistic and always standing behind trade and industry,” he said.

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