The Indian federal government has changed its Production Incentive Program (PLI) to allow manufacturers to travel to India in a meaningful way. The move is expected to allow Apple, Samsung, Foxconn, Oppo and Vivo to play a bigger role in local production. According to an article in The Economic Times, "the committee of chartered secretaries met on Friday and decided to remove the clause, which valued plant and machinery imported into India at 40% of their value, and agreed to a few other changes so that manufacturing can move to India in a meaningful way." Other changes to the PLI rules include reducing the excessive amount of business information the government previously required recipients to share and clauses allowing the empowered committee to unilaterally change the rules for investors.
All eyes on Apple
While Apple would be eager to transfer some of its production to India, it had concerns about some provisions of the PLI regime. The premium smartphone maker is looking to shift production through its subcontractors like Foxconn, Wistron, and Pegatron. And the PLI schema change will be a big attraction for him. Apple produces the iPhone 7 and iPhone XR in India, while the iPhone SE and iPhone 6S, which were also produced here, have been removed from Apple's global product portfolio. In a report published last month, a government official said: "We expect Apple to produce up to €40 billion worth of smartphones, primarily for export through its contract manufacturers Wistron and Foxconn, taking advantage of the related incentive benefits. with production (PLI)." The PLI scheme is an incentive of 4% to 6% on incremental sales of goods made in India for a period of five years. If manufacturers intend to take advantage of the incentive, they will have to produce high-end phones worth more than Rs 4.000 crore for the base year. It should be followed by Rs 8,000 crore, Rs 15,000 crore, Rs 20,000 crore and Rs 25,000 crore, for the next four years respectively.It will be a very wise decision by Apple if it is implemented… The tech giant Apple is thinking of moving most of its production from China to India. The iPhone maker plans to produce up to €40 billion worth of smartphones over the next five years... May 31, 2020