Apple's Taiwan suppliers, Samsung apply for India's smartphone scheme

[August 01, 2020]  By Sankalp Phartiyal

NEW DELHI (Reuters) - Apple Inc's <AAPL.O> Taiwan contract manufacturers Foxconn <2317.TW>, Wistron Corp <3231.TW> and Pegatron Corp <4938.TW> have applied for India's $6.65 billion scheme to boost local smartphone manufacturing, the country's tech minister said on Saturday.

The production-linked incentive (PLI) plan offers companies cash incentives on additional sales of devices made locally over five years, with 2019-2020 as the base year. India hopes it will help turn the country into a global smartphone export hub like neighbouring China.

Apple already assembles some its smartphones, including the iPhone 11, via Foxconn and Wistron's local unit in two southern Indian states.

Pegatron, one of Apple's top suppliers, has yet to open a plant in India, but is in talks with various states to set up operations, according to sources.

South Korea's Samsung Electronics Co Ltd <005930.KS> has also applied for PLIs, technology minister Ravi Shankar Prasad told a news conference.

Samsung runs what it calls the world's biggest mobile phone manufacturing plant on the outskirts of the Indian capital, New Delhi. It also exports devices made at the plant.

People wear masks to protect themselves from coronavirus disease (COVID-19), while listening to the annual general meeting at the lobby of Foxconn's office in Taipei, Taiwan, June 23, 2020. REUTERS/Ann Wang/File Photo

Lava, which once also assembled some models for China's Lenovo <0992.HK>, was among the Indian companies which had applied for the scheme, Prasad added.

India's smartphone sector is a bright spot in the South Asian nation's economy, thanks to Prime Minister Narendra Modi's emphasis on local manufacturing in a bid to create jobs.

With more than 1 billion wireless subscribers and roughly 350 million users still on basic phones, India offers huge room for growth to smartphone makers.

Its labour, which is cheaper than China's, also allows companies to produce or assemble at lower costs.

And companies are ramping up.

Foxconn said it plans to invest up to $1 billion to expand a factory in Tamil Nadu state where it assembles iPhones, sources told Reuters last month.

(Reporting by Sankalp Phartiyal; Editing by Kim Coghill)

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