Another blow to China! 24 companies plan to shift production units to India

The government's efforts to woo firms moving out of China appear to be working as 24 companies plan to set up mobile phone factories in India. Assembly partners of giant players in the electronics segment such as Samsung and Apple have shown interest in moving to India. These companies have pledged investments to the tune of $1.5 billion so as to establish mobile-phone factories, Bloomberg reported.

The companies are planning to diversify supply chains amid the ongoing coronavirus pandemic and US-China trade war. So far, India has lagged behind countries such as Vietnam, Cambodia, Myanmar, Bangladesh and Thailand in enticing these companies to set up plants in the country. However, the Indian government expects that the PLI could lead to production of $153 billion of manufactured goods and generation of nearly 1 million direct and indirect jobs.

In March this year, the government had announced a production linked incentive scheme (PLI) for large scale electronics manufacturing to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components. The scheme extended an incentive of 4 per cent to 6 per cent on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies, for a period of five years subsequent to the base year as defined. Later such incentives were also extended to other sectors including pharma, auto, textiles, and food processing under the program.

According to recent reports, Apple has plans to expand manufacturing in India. Its supplier Foxconn is also planning to invest up to $1 billion in India. Foxconn's planned investment in the plant near Chennai would take place over the course of three years. "There's a strong request from Apple to its clients to move part of the iPhone production out of China," Reuters had reported citing unidentified sources.Also read: Rs 50,000-crore push to mobile manufacturing can't dent China's domination

Also read: Samsung plans to shift smartphone production to India from Vietnam, make devices worth $40 billion