India is now ready to produce its own “Made in India” mobile phones. To make this easier, the Indian government is preparing to introduce a new version of the Production Linked Incentive (PLI) scheme – PLI 2.0 – which is specifically designed for mobile phone manufacturing. Its objective is to increase domestic production of mobile phone parts in India as much as possible, so that dependence on foreign imports can be reduced. Under this new scheme, the government wants to ensure that at least 55% of the parts used in mobile phones are made in the country. Currently this figure is only 18-20%.
Government’s new initiative
According to reports, the government is planning to implement this new initiative by linking it with the ₹40,000 crore Electronics Components Manufacturing Scheme (ECMS). This strategic move is expected to boost domestic production of critical parts such as displays, camera modules, chipsets and lithium-ion batteries.
Finance Ministry’s concerns
The Finance Ministry has expressed concern that while India has made considerable progress in manufacturing and exporting smartphones, the country is still dependent on imports for many expensive electronic parts. As a result, the main focus of the new scheme will be on giving priority to local sourcing of parts and domestic production, rather than just promoting higher sales. The government can give additional incentives to companies that manufacture or buy essential parts of mobile phones in India.
Under the original PLI scheme launched in 2020, so far 32 companies have successfully achieved their targets of investment, production and exports. Under this scheme, the following achievements have been made so far:
* A total investment of ₹17,519 crore has been made.
* Production of ₹11.01 lakh crore has been recorded.
* Exports worth ₹6.27 lakh crore have been achieved.
The government hopes that many of the 75 manufacturing units approved under ECMS will start production this year, thereby accelerating the pace of mobile parts manufacturing in India.