Indian smartphone firms having a tough time meeting PLI targets for FY24

On the other hand, global smartphone makers Foxconn (Hon Hai), Wistron, and Samsung have been meeting their targets successfully and are likely to do the same this year as well

Indian smartphone manufacturers such as Lava and Bhagwati (Micromax) are struggling to meet their incremental targets under the government's production-linked incentive (PLI) scheme for the third consecutive year in FY24, The Economic Times (ET) has reported. This highlights the challenges in the government's plans to empower local manufacturing.

Industry experts told the newspaper that Dixon Technologies is expected to be an exception among local manufacturers, as the company has secured large orders and signed new ones. It is becoming clear that while global manufacturing companies like Foxconn, Wistron, and Samsung have leveraged the PLI scheme for mobile phones and turned it into a grand success, local smartphone brands like Lava may need more time to establish themselves, the report cited an industry expert as saying.

Also Read: Centre to hold PLI scheme payouts' crucial mid-year review next week

 

Lava's co-founder SN Rai said that the company missed the incremental production targets under the PLI scheme in the financial year 2022-23 (FY23), but remains hopeful of achieving the target for FY24. Lava will meet the targets on the back of a resurgence in its brand and increased government procurement of smartphones from Indian companies, Rai added.

However, experts are not very optimistic about other local companies like Bhagwati Products, the manufacturer of Micromax smartphones, and Optiemus Electronics, as they are likely to miss the targets for the current financial year as well.

Bhagwati has been unable to secure large orders from Chinese smartphone brands despite government support due to factors such as limited capacities and low capital expenditure.

Global manufacturers succeeding

As local manufacturers struggle, global smartphone makers Foxconn (Hon Hai), Wistron, and Samsung have successfully met their targets and are likely to continue doing so this year. The third iPhone manufacturer in India, Pegatron, is also expected to meet the targets for FY24, industry experts said.

Also Read: PLI good for telecom, need to adjust for others: NITI Member Virmani

What is the PLI Scheme?

Through a gazette notification dated April 1, 2020, the Centre announced a production-linked incentive scheme to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units. Apple is leading domestic manufacturing and exports from India and is among the major beneficiaries of the scheme.