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Apple, Samsung Add $5 Bn to India’s Local Manufacturing Scheme

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As India renews its thrust on local manufacturing of electronics under the production-linked incentive scheme (PLI) with Union Budget 2022-23 around the corner, Apple and Samsung alone are expected to manufacture/assemble smartphones worth around $5 billion (nearly Rs 37,000 crore) in the financial year 2021-22.

The two giants are set to surpass the PLI targets set by the government by over 50 percent, according to industry experts.

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“The leading global value chains (GVC) firms have got off to a blazing start. Besides Pegatron and Bharat FIH which are now gearing up, the big three — Wistron, Pegatron and Samsung — will achieve significant production of $5 billion in 2022,” Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA), told IANS.

Apple’s contract manufacturers in India — Foxconn and Wistron — will avail of the PLI incentives for the first time this year.

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The iPhone maker’s second-biggest global manufacturer Pegatron is likely to commence operations in India this year.

Samsung, which has the world’s largest mobile handset manufacturing factory in Noida, Uttar Pradesh, will avail of the incentives under the scheme for the second year.

According to Mohindroo, Indian players like Lava, Padget Electronics (Dixon), and UTL also appear to be cracking the thresholds while “Opteimus and Bhagwati are gearing up”.

Finance Minister Nirmala Sitharaman extended the PLI scheme for large-scale electronics manufacturing last year with a focus on mobile phones by a year until 2025-26, though the base year of the scheme, 2019-20 remains the same.

The PLI scheme provides an incentive of 4 percent to 6 percent on incremental sales of goods under target segments that are manufactured in India for five years.

Apple and Samsung are also exporting locally-produced smartphones to the world like never before.

In 2021, the top countries that ‘Make in India’ iPhones were exported to include the UK (27 percent), Japan (24 percent), the Netherlands (23 percent), Germany (7 percent), Italy (4 percent), Turkey (4 percent) and the UAE (2 percent), according to data by market research firm CMR.

The top countries that Samsung exported to from India in 2021 include the UAE (47 percent), Russia (12 percent), South Africa (7 percent), Germany (5 percent), Morocco (4 percent), and the UK (3 percent).

The introduction of the PLI scheme has given a positive thrust to India’s participation and rise in the global value chains.

“With all the green shoots, the country expects exports from India to grow further in the coming years. Samsung and Apple’s manufacturing partners have invested under the PLI scheme and both dominate mobile phone exports from India,” said Prabhu Ram, Head-Industry Intelligence Group, CMR.

For instance, Apple’s share of iPhone exports from India stands at more than 4.6 million units in 2021, with exports to Europe, Japan, and the Middle East, among others.

“Over the past four years, Apple’s share of make-in-India iPhones has grown 15 times to reach 75 per cent in 2021,” Ram told IANS.

Apple has now started assembling its new flagship iPhone 13 in India. iPhone 13 is being assembled on a trial basis at the Foxconn plant in Chennai and will be available in the domestic market and for exports from the country by early next year.

It is reportedly ramping up production of iPhones, iPads, Macs, and other devices in India and Vietnam to end its dependence on China.

The tech giant is already assembling its highest-selling models iPhone 12, iPhone 11, and XR in India, along with iPhone SE, 7, and 6S.

Apple started manufacturing iPhones in India in 2017 with iPhone SE.

(Nishant Arora can be reached at nishant.a@ians.in)

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