Apple and its manufacturing partners to benefit from India’s PLI plan

India’s technology minister says the company has approved a 73.5 billion rupee (about US$1.02 billion) plan to boost local manufacturing and exports of IT products such as laptops, tablets, personal computers and servers, reports Reuters.

The production-linked incentive (PLI) plan will help India export IT goods worth 2.45 trillion rupees, minister Ravi Shankar Prasad said in a news conference. It provides manufacturers cash-backs of between 1% and 4% of additional sales of locally made goods over four years, with 2019-2020 as the base year.

The government expects such international companies to produce mobile phones worth ₹900,000 crores ($122.6 billion) in the next five years in India. It also approved applications from some domestic players such as Micromax and Lava that are expected to produce phones worth ₹125,000 crores ($17 billion). Authorities also said that 60% of this manufacturing will go towards exports 

Prachir Singh, an analyst at research firm Counterpoint, told TNW that Apple and Samsung will benefit hugely from this plan, adding: “After the US-China trade war, Apple has been looking to diversify its manufacturing locations. This PLI scheme will come in handy for them reduce reliance on its China-based operations. 

In May 2020, India’s government dropped “contentious” clauses including the evaluation of plant and machinery to be brought from China and South Korea, which had been opposed mainly by Apple, paving the way for the tech giant and other companies to make a larger play in local production using the PLI scheme.

Reuters notes that Prime Minister Narendra Modi’s policy push in the electronics sector has prompted Apple suppliers Foxconn and Wistron to expand in India, and driven Pegatron to set up base there.

The three Taiwan companies have committed to invest roughly $900 million to make iPhones in India as part of a $6.7 billion PLI plan launched by the government last year.

Dennis Sellers
the authorDennis Sellers
Dennis Sellers is the editor/publisher of Apple World Today. He’s been an “Apple journalist” since 1995 (starting with the first big Apple news site, MacCentral). He loves to read, run, play sports, and watch movies.