Apple and Samsung may manufacture smartphones worth 5 billion dollars under Central Government’s Production Linked Incentive (PLI) Scheme in FY22. This is higher than the target set by government by 50% and this comes as a good news for Indian Economy.

Smartphones worth 2 billion dollars will be exported from India in Financial Year 2022. A senior government official said, “The global companies are expected to exceed their targets this year and we expect the numbers to keep improving each year.”

Under PLI Scheme the incentives worth Rs 39,000 crores will be provided over a span of five years. PLI Scheme was launched by Government of India to attract manufacturing opportunities in the country. The scheme is targeting to encourage manufacturers to shift their base from China to India.

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Pegatron, Wistron, Foxconn Hon Hai and Bharat FIH are the chosen applicants that would be covered under PLI Scheme. These manufacturers will do smartphone production in Global Manufacturer Segment.

The government officials have said that government put the target to 3.2 billion dollars for qualifying applicants under PLI Scheme for FY22.

Pegatron is second largest manufacturer of Apple Samsung smartphones after Foxconn and it will start its operations within few months in country. Bharat FIH currently manufactures smartphones for Chinese company Xiaomi. The unit cost of manufacturing Xiaomi smartphones is under Rs 15,000 therefore Bharat FIH does not qualifies for incentives under PLI Scheme.

The rate of incentives provided for first and second year is 6%. For third and fourth year it is 5% and for fifth is 4%.

The incentives mean that if company will meet its target, government will pay 6% of the cost of production. The targets for first to fifth year are: