1 week ago
India's Mobile Manufacturing Scheme Targets Technology and R&D Capabilities
India has introduced a large scheme to support mobile phone manufacturing.
The plan gives extra rewards to Indian brands that design phones and conduct research in India.
Companies can also receive benefits for buying more components from Indian suppliers.
A qualifying Indian brand could receive incentives totaling nearly 9.5% of eligible sales.
Industry leaders believe this could help Indian companies create their own technology instead of only assembling phones.
The share of phone value made in India has already increased from 15% to 23%.
A separate component scheme is expected to help increase that share further.
However, India still needs stronger batteries, displays, semiconductors, quality systems and skilled workers.
India’s Rs 62,500 crore Mobile Phone Manufacturing Scheme explicitly rewards domestic design and research and development.
Qualifying Indian brands can receive up to nearly 9.5% of eligible sales through combined incentives.
The scheme aims to encourage Indian companies to develop their own products, technology and intellectual property.
Domestic smartphone value addition has risen from 15% to 23%, with further gains expected from component manufacturing.
Industry executives say India must strengthen batteries, displays, semiconductors, quality systems and skilled manpower.
- Who
- Indian mobile-phone brands, manufacturers and electronics manufacturing services companies are affected; industry executives from the India Cellular and Electronics Association, NxtQuantum Shift Technologies and the Electronic Industries Association of India commented on the scheme.
- What
- India notified a Rs 62,500 crore Mobile Phone Manufacturing Scheme that provides incentives for eligible sales, domestic component sourcing, and Indian design and research and development.
- Where
- The scheme applies to mobile-phone manufacturing and design and research activities in India.
- When
- The scheme was recently notified; the article gives no specific date.
- Why
- It is intended to expand domestic technology, intellectual property, component sourcing and technical know-how rather than focusing only on assembly, scale and exports.
Key facts
- Scheme size
- Rs 62,500 crore
- Indian-brand incentive
- A flat 5% of eligible sales, plus 1.5% for domestic component sourcing and up to 3% for Indian design and research and development
- Maximum combined incentive
- Nearly 9.5% of eligible sales
- Other manufacturers and EMS players
- A sliding incentive of 2.25% to 5% on incremental sales
- Domestic value addition
- Smartphone domestic value addition has risen from 15% to 23%
- ECMS approvals
- The Electronics Component Manufacturing Scheme approved 106 applicants across 30 products and 15 states
- ECMS proposed investment
- Rs 69,548 crore
Quotes
Pankaj Mohindroo
Chairman of the India Cellular and Electronics Association
“The larger opportunity is not simply about making products cheaper, it is about transferring technology and building technical know-how within India”
financialexpress.com
“The scheme makes design and R&D a core part of the incentive structure rather than an incidental element of manufacturing”
financialexpress.com
Sources
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