Samsung is one the largest smartphone manufacturers in the country and enjoys a 20 percent market share. It is the only applicant to have been eligible for incentives for FY21 and FY22, under the famed Production Linked Incentive (PLI) scheme for mobiles. However, Samsung is yet to see the disbursement of incentives.

In fact, the only company to have received government funds, under the PLI, has been Padget Electronics. Padget is a 100 percent subsidiary of Dixon Technologies. It is reported to have received Rs 50 crore for FY22, after the approval of the Empowered Committee headed by the NITI Aayog CEO Parmeshwaran Iyer.

Samsung’s claims of Rs 900 crore for FY21, which is higher than the government estimates, is being scrutinised by the Empowered Committee. The government has sought clarification from the Korean manufacturer, causing the wait for disbursement to get longer.

But industry insiders are hopeful of the road ahead. Pankaj Mohindroo, the Chairman of India Cellular and Electronics Association (ICEA), clarified that the Centre has expanded the scope of the scheme to six years, giving the manufacturers the flexibility to pick their base year. While Samsung has picked FY21 as the first year of the scheme, all others have opted for FY22 as the first.

He explained that except one, all foreign companies, approved under the scheme, have met their targets for FY22. Pegatron which began production this year, will be seeking incentives for only four years, beginning with FY23. For domestic companies, Pankaj Mohindroo explained that two out five applicants have met FY22 targets.

Also Read:

Banking services to be hit due to strike on November 19

He observed that investment side targets were not a concern with global companies already having invested the required amount and domestic companies making necessary investments every year.

Echoing similar sentiments, Hari Om Rai, the Chairman and MD of Lava International, claimed a growth rate of 60 percent, noting that investments for eligibility under the PLI scheme had been made.

There were, however, twin concerns he had red flagged. He noted that the chip shortage did leave the company hamstrung, but expressed optimism that the semicon supply side issues were being resolved. He also raised concerns about demand. Numbers released by Cybermedia Research reveal that Q2FY22 saw smartphone sales dip by 12 percent. Recent data from International Data Corp, also suggests that 2022 may see 80 million shipments of 5G smartphones, as compared to the initial forecast of 85-90 million shipments in 2022.

However, Rai has expressed confidence that Lava will hit the necessary targets to claim benefits under the PLI scheme.

Also Read: Views | Indian Railways’ night ban on mobile nuisance must inspire good public behaviour in other walks of life

First Published:Nov 17, 2022 7:07 PM IST