Electronic companies are advocating for a Rs 300-Rs 350 billion production-linked incentive (PLI) scheme for components and sub-assemblies, alongside capital expenditure support, to boost the surging exports of mobile phones and other electronic devices. The India Cellular & Electronics Association (ICEA), representing leading smartphone brands and manufacturing companies, emphasised the necessity of such incentives to meet the escalating demand for electronics components, projected to reach $75-$80 billion by 2026 and $300 billion by 2032.

The scheme aims to elevate domestic value addition in mobile phone manufacturing to 35-40%, from the current 18%, stated ICEA, underscoring the importance of running component manufacturing parallel to the development of India's semiconductor ecosystem. The industry body highlighted the need to transition from heavy reliance on imports towards fostering an indigenous semiconductor ecosystem, supported by localised PCBA operations, focused circuit design, and deepened value addition across product manufacturing.

In its submission to the ministry of electronics and information technology, the industry has demanded PLI support with a 4-6% incentive structure for the manufacturing of sub-assemblies, high-end printed circuit boards, and various components. ICEA recommended supporting companies with a threshold investment of Rs 10 billion or more, providing them with 40% capex support and an average incentive of 5% for a period of six years. Additionally, the industry proposed offering 25% capex support to supply chain ancillary units supporting component manufacturing. Furthermore, it suggested providing 4-6% incentives tied to incremental sales for critical sub-assemblies and components. Moreover, the industry sought interest subvention of 5% for component production on term loans and for working capital requirements to alleviate the high cost of finance in India. (Source: ET)