Challenges Persist for Indian Smartphone Manufacturers in FY24 Under PLI Scheme

Struggles Continue for Local Brands

In the realm of Indian smartphone production, entities like Lava and Bhagwati (commonly known as Micromax) grapple persistently with formidable hurdles in meeting their incremental manufacturing goals throughout the ongoing fiscal year 2024 under the aegis of the government’s Production-Linked Incentive (PLI) initiative. This predicament casts a shadow of doubt upon the efficacy of the government’s endeavors to bolster indigenous manufacturing within this sector.

Dixon Technologies: A Beacon of Hope

An Exception in the Local Manufacturing Landscape

Experts in the industry suggest that Dixon Technologies may emerge as an exception among local manufacturers, as the company has secured substantial orders and continues to sign new ones. While global manufacturing giants like Foxconn, Wistron, and Samsung have successfully capitalized on the PLI scheme for mobile phones, it appears that local smartphone brands like Lava may require more time to establish themselves.

Lava’s Optimism Amidst Challenges

Challenges Faced by Lava

Lava’s co-founder, SN Rai, acknowledges that the company missed its incremental production targets under the PLI scheme in FY23. However, he remains hopeful about achieving the targets for FY24. Lava’s resurgence in brand prominence and increased government procurement of smartphones from Indian companies are expected to be key factors in meeting these targets.

Gloomy Prospects for Other Local Players

Struggles Continue for Bhagwati Products and Optiemus Electronics

Industry experts express pessimism regarding other local companies such as Bhagwati Products, the manufacturer of Micromax smartphones, and Optiemus Electronics. These companies are likely to miss their targets for the current financial year due to various challenges, including limited production capacities and low capital expenditure.

Global Manufacturers Thriving

Global Players Succeed Amidst Challenges

In contrast to local manufacturers’ struggles, global smartphone giants like Foxconn (Hon Hai), Wistron, and Samsung have consistently met their targets and are expected to continue doing so in the current year. Pegatron, the third iPhone manufacturer in India, is also anticipated to achieve its targets for FY24, according to industry experts.

The PLI Scheme’s Background

Government Initiative to Boost Domestic Manufacturing

The government introduced a Production-Linked Incentive (PLI) scheme through a gazette notification dated April 1, 2020, with the aim of stimulating domestic manufacturing and attracting significant investments in mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking, and Packaging (ATMP) units. Notably, Apple has been at the forefront of domestic manufacturing and exports from India and is among the major beneficiaries of the scheme.