The Modi government has been trying to boost local manufacturing driven by the PLI (production linked incentive) schemes across sectors. Now, as per reports, the government is looking to provide nearly $3 billion aid to the electronics makers and also reduce import fee on the components to boost local production.
Manufacturers of components such as camera parts and batteries could get up to $2.7 billion in aid from the government. In addition, tariffs could be reduced on importing of some electronic components very soon, said a Gagdgets360 report.
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The cabinet will make the final decision on the proposal, and if cleared, it will be announced in the upcoming budget in February. The government wants to invite global companies to manufacture in India both to serve the Indian market and export to the international markets. Major players such as Apple, Samsung, Xiaomi, and more in the electronics market are already making products in India and exporting them internationally.
Apple plans to strengthen its retail presence in India and also scale production capacity in the coming years. Some of the components that the government is targeting to provide subsidy for are microprocessors, storage, memory, camera components such as lens, and multi-layered printed circuit boards.
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India's smartphone market is growing at a rapid pace and is expected to cross $50 billion in value in 2025, according to a Counterpoint Research report. The average selling price (ASP) of devices is also going up as customers are upgrading to more premium devices. Thus, a reduction in components import fees will benefit the market even further. The tariffs currently range from zero to 20%, and it is about 5-6% higher than countries such as Malaysia and China.
