Mobile makers seek 2-3 month extension on PLI targets

Suffering from an acute component shortage of chipsets and pandemic-related delays in capacity expansion, the handset manufacturers want a 2-3 month extension to meet the investment and the production targets for the first year under the government’s ambitious scheme to push local manufacturing and exports. “The industry is suffering right now as there is a shortage of semiconductor chips and raw materials and it is already impacting the targets,” said Pankaj mohindroo, chairman, India cellular and electronics Association (Icea). As a result, handset makers say, even though exports this year would exceed last year’s rs 27,400 crore, it would fall short of the industry’s targeted rs 50,000 crore. As per reports, executives say handset makers are likely to write to the government shortly on the need for an extension of the PLI target timelines.

In early October, the government cleared 10 companies to avail of benefits under the production-linked incentive (PLI) scheme – five foreign firms including two units of Foxconn, Wistron, Pegatron and Samsung and Indian companies Lava, micromax, Karbonn, dixon and Optiemus. Under the PLI scheme, the target for incremental investment over base year for foreign companies is rs 250 crore in the first year, only for phones with an invoice value of rs 15,000 and above. For domestic companies, it is rs 50 crore for any phones produced. The target for incremental sales of manufactured goods over base year is rs 4,000 crore each for foreign companies while for domestic companies, it is rs 500 crore. Proposed incentive rate in the first year for both domestic as well as foreign companies is 6%. Industry fears that the targets would be difficult to meet, with the severe global component shortage set to last at least till the end of this fiscal year through march 31, 2021.n