PLI timeline for mobile phone manufacturing may begin in FY22
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A change in the timeline will mean manufacturers need to post incremental production worth Rs 4,000 crore in this fiscal year, instead of Rs 8,000 crore in the second year. They will thus be able to avail of maximum incentives worth 6% during the year, experts said.
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The Centre is looking to make the country a global manufacturing hub with an export target for phones worth $100 billion over the next five years.
The government is considering making FY22 the first year of production instead of FY21 for the production-linked incentive (PLI) scheme for mobile phone manufacturing, senior government officials said. If approved, the move will bring relief to the likes of iPhone contract makers Foxconn and Wistron besides homegrown brands
Handset makers may be forced to cut production as inventory starts piling up
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“Chances are there will be inventory issues due to dip in demand especially in May. Offline retailers are very cautious, especially when there is uncertainty of business operations amidst rising cases and possibility of partial lockdowns,” Tarun Pathak, associate director at Counterpoint Research, said.
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Handset makers may be forced to cut back on production in the coming weeks with inventory beginning to pile up as demand tapers owing to Covid restrictions and consumers put off purchases amid fears of economic challenges, industry executives and market experts say.
Handset makers want proposed duty on components rolled back
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They have argued that the tariff will hurt the plans of global value supply chains looking to shift to India and domestic device makers alike. It will also threaten investment and production targets set under the Production-linked Incentive (PLI) scheme, they said.
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Mobile handset makers have urged the government to roll back the 2.5% customs duty on some components proposed in the budget. They have argued that the tariff will hurt the plans of global value supply chains looking to shift to India and domestic device makers alike. It will also threaten investment and production targets set under the Production-linked Incentive (PLI) scheme, they said.