Problems of domestic and foreign companies, including Foxconn, making Apple phones, increased, waiting for Chinese engineers to build machines
Many companies no longer want to work in China. They are taking out all their setup from there. Most of them have turned to India because of the Production Linked Incentive (PLI) scheme. Many have come here last year with their big machines. Now the problem of setup of machines has arisen in front of them. Samsung is also facing similar problems with Apple’s product makers Foxconn and Wistron. Local company Lava, Micromax has a similar situation.
Actually, the machines of these companies in China were set up by the engineers and technicians there. Here this work cannot be done without them. Even the companies that came here last year have not started working yet. In such a situation, these companies have urged the government to grant visas to Chinese engineers and technicians early. Indian Embassy in Beijing is working fast to grant visas to the engineers selected under the PLI scheme.
Foreign companies will have to produce goods worth 4000 crores
In the PLI scheme, foreign companies like Apple and Samsung have set different targets for local companies like Lava and Micromax. The annual incentive range will be between 4% and 6%. Foreign companies will need to invest Rs 250 crore in the first financial year (FY21). At the same time, compared to last year, goods worth Rs 4,000 crore will have to be produced. The invoice value of phones made by foreign companies should be more than Rs 15,000. On the other hand, Indian companies will need an investment of Rs 50 crore. They have to make Rs 500 crore phones in the first year.
1.46 Lakh Crore Incentive Amount Received In PLI Scheme
Under the PLI scheme, the central government will provide an incentive amount of Rs 1.46 lakh crore during the next 5 years. Under this scheme, components and machinery are needed to set up a new unit in the country. It can be set up by Chinese engineers only. However, this work has been delayed due to the Covid epidemic. Once Chinese engineers and technicians set up these machines, then within two years companies will be in a position to handle them themselves.
70% production of Apple in China-Taiwan, but shifting from China
The work is also delayed due to the suspension of components company and international flights. The industry has urged to roll over its first-year production target in the second and third year. Apple stated that about 70 percent of its production is from China and Taiwan through contract manufacturers. Their manufacturing unit is shifting not from Taiwan but from China.
The applicant is making every possible effort to meet the target met under the PLI scheme. Many of them will complete it by March 2021. At the same time, many will be able to complete this by the beginning of 2021-22. The India Cellular and Electronics Association (ICEA) said that PLI applicants who meet the investment target before March 31, 2021, will be honored.
