Mobile makers may miss target under PLI scheme

The companies include iPhone maker Apple's contract manufacturers Foxconn Hon Hai, Wistron, and Pegatron, apart from Samsung and Rising Star.

New Delhi: Mobile phone manufacturers, including Samsung and Apple’s vendors, are likely to miss the production target of the current financial year under the production linked incentive (PLI) scheme and have approached the government to roll over timelines of the scheme.

The government in October had cleared 16 proposals from domestic and international companies entailing investment of Rs 11,000 crore under the PLI scheme to manufacture mobile phones worth Rs 10.5 lakh crore over the next five years.

The companies include iPhone maker Apple’s contract manufacturers Foxconn Hon Hai, Wistron, and Pegatron, apart from Samsung and Rising Star. Mobile devices industry body ICEA, whose members include Apple, Foxconn, Wistron, Lava etc, wrote to Electronics and IT Secretary Ajay Prakash Sawhney on December 24 that there will be a shortfall in targets under the PLI scheme due to shortage of chips coupled with supply constraints posed by the COVID-19 pandemic.

“The PLI applicants are working very furiously and with everything possible at their command to fulfil the targets. Many of them will be able to complete it but not before early financial year (FY) 2021-22, and a handful will even be able to complete by March 2021. However, they are skating on thin ice because there could be many slips in these extraordinary circumstances,” ICEA chairman Pankaj Mohindroo said in the letter.

The India Cellular and Electronics Association (ICEA) cited a shortage of electronic chips in the global market due to Chinese technology major Huawei purchasing two-year stock of the component to averse impact of US ban on the company effective from September 2020.

“We have come to know that the suppliers have cut supplies to our Indian companies by 97 per cent in certain cases,” Mohindroo said. The ICEA said that the operations of several companies were hit four months before the PLI scheme started due to international flight ban along with other logistics issue and the applicants got very little time to negotiate, select, order, procure and install all the machinery and equipment after they were given scheme qualification letter on October 7.

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