Samsung and three major contract manufacturing partners from Apple are among 16 companies to receive $ 6.65 billion in incentives under India's federal plan to increase domestic smartphone production over the next five years. These companies applied for the incentive program in August.
In a statement Tuesday evening, India's Department of Electronics and Information Technology (MeitY) said these companies will produce more than $ 143 billion worth of smartphones and other electronic components over the next five years. In return, India is offering them a 4% to 6% incentive for additional sales of goods locally manufactured over a five-year period, with 2019-2020 as the base year.
The New Delhi move aims to significantly improve India's manufacturing and export capabilities and create more local jobs. Around 60% of the locally produced products are exported, announced the Indian ministry. Companies will create more than 200,000 direct job opportunities and up to 600,000 indirect job opportunities over the next five years, the ministry said.
The move is also a forerunner of how the dynamics among the major smartphone manufacturers in India, the world's second largest market, could change over the next few years. The recording of Foxconn, Wistron and Pegatron highlights how quickly Apple plans to expand its local manufacturing capacity in India. Wistron began assembling a handful of iPhone models in India three years ago, followed by Foxconn. Pegatron has not yet started production in India.
"Apple and Samsung together account for nearly 60% of global mobile phone sales, and this program is expected to multiply the manufacturing base in the country," the ministry said.
"Industry has restored confidence in India's outstanding progress as a world-class manufacturing base, and this is in line with the prime minister's call for AtmaNirbhar Bharat – a separate India," the ministry added.
The Indian companies Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics have also received approval. However, the list does not include the Chinese smartphone manufacturers Oppo, Vivo, OnePlus and Realme, which did not apply for the program. Chinese smartphone providers currently dominate around 80% of the Indian market. Samsung, which once led the Indian smartphone market, has faced intense competition from Xiaomi and Vivo in recent years.