The Indian government is opening up the field for global manufacturers to build plants in the country.
The Indian government finally easing up trade restrictions and norms to encourage mobile manufacturers to set up base in the country. According to the latest ET report this week, the Ministry has decided to waive off a slew of regulations and making brands more active in decision making for the industry. All this is likely to attract giants like Apple to move its production unit from China and finally look to establish its base in India over the coming years.
And now, it has been mentioned that slew of brands are lining up for the incentives attached with the Production-linked scheme worth over Rs 41,000 crore. The government will probably pleased to know the likes of Vivo, Foxconn, Samsung, Wistron and Oppo among others are likely to apply for this proposal. Even brands like Xiaomi could join the ranks, as the look to build on their existing manufacturing setup and make them even more robust.
As part of the first phase, the PLI scheme will be directed at companies, operating in the domestic market already. Which is why it's obvious to includes names like Foxconn. The scheme is meant to improve and establish India's standing among the top production countries such as China and South Korea. Till date, companies have mostly invested in assembling products, for which the components are imported from other markets, especially China. But with the new plan in its pipeline, the government will be hopeful of better returns than its much talked about making in India program.
Unlike MIN, the scheme offers direct benefits to manufacturers for a period of five years. This was also pointed out by Apple during its discussions with the Indian government over the last few years. But it seems their wishes are finally being heard and met.
The Ministry is also going to remove clauses like production machinery valued at 40 percent which was a big deterrent for companies to localise their manufacturing. The new-look scheme from India is probably their best bet to take advantage of the unrest between the US and China. If the scheme works out as advertised, expect more global companies to eye India as its manufacturing hub in the near future.
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