The cabinet ministry of the country has approved a budget of $6 billion in order to give a boost to the electronics manufacturing ecosystem. This budget has been to ensure prosperity to the Make-in-India drive by launched PM Narendra Modi. Only after Modi became PM, India has become the second biggest mobile manufacturer in the world.
On Saturday, government officials stated that New Delhi will be providing a margin of 2-4 percent incentives to mobile manufacturing companies for incremental sales. Starting from financial 2019-20 until the next five years, this incentive scheme has been planned.
Contract as well as brand manufacturers such as Hon Hai Precision Industry Co Ltd (Foxconn) (2317.TW) and Wistron Corp (3231.TW) - Xiaomi Corp (1810.HK) and Oppo will now be assembling
mobile phone for big time phone companies such as Apple and Samsung among several others.
25 percent incentives will be provided on the capital expenditure of a number of electronic components such as semiconductors and display fabrication units, as was expressed by government officials to the media. They further notified that all the new companies that are investing in this domain or all the existing players who wish to expand their production rates are eligible to avail this policy.
Play and plug facilities, ready-built shades for factory and common facility centres under one single plan of 200 acres has also been sanctioned by the government to boost the productivity of smart phones in the country. This will be one single manufacturing cluster which will have each of the above facilities and the centre wants to build many like this in the coming five years.
This measure has been taken to revamp the global export for mobile phones which has been severely disrupted by the COVID-19 outbreak in China. China being the biggest producer of electronics goods in the world has been affected by the virus and all the global leaders will soon be looking for substitute in manufacturing geographies. India also being among the developing nations has comparatively cheaper pricing in terms of raw material and labour.
With a current usage volume of 480 million, India offers electronic manufacturers substantial room for growth along with needed capital and manpower facilities. It is a smart substitute for quality and cost-effective manufacturing compared to China.