India has stepped up its bid to become a major manufacturing hub for the smartphone industry with a multi-billion dollar incentive package to encourage more production and investment in the country. The €6.650 billion Production Linked Incentive (PLI) program promises approved vendors cash rewards of between 4% and 6% on sales of devices made in India over the next five years. The government has approved sixteen companies for the program, including Samsung, Apple contract manufacturers Foxconn, Wistron and Pegatron, and several local manufacturers.
Smartphones from India
This initiative is expected to increase investment, create hundreds of thousands of jobs and fulfill the government's ambition to increase exports as part of a broader economic strategy. The additional investment expected from Apple partners alone is estimated at €900 million. India has become an increasingly popular choice for sellers of late, partly due to the large domestic market, but also due to changing economic and political conditions elsewhere. China has long been the predominant location for the industry, but concerns about an economic slowdown, rising labor costs and ongoing trade tensions with the United States have led many manufacturers to seek alternatives. . This list includes not only India, but also Thailand and Vietnam. Samsung and Sony have closed their last factories in China, while Apple, which has long relied on China for rapid device assembly and component manufacturing, is also looking to diversify its supply chain for the same reasons. . It is believed that between 15 and 30% of the activities could be moved to other countries, including India, Indonesia, Malaysia and Mexico. However, it would take several years to displace even a part of the production from China given the complex ecosystem that has been established there.