Indian smartphone manufacturers, including Lava and Bhagwati (Micromax), continue to face challenges in meeting their incremental targets under the production-linked incentive (PLI) scheme for the third consecutive year in FY24. Dixon Technologies stands out as one of the few exceptions, securing significant orders and new contracts, according to industry insiders. While global giants like Foxconn, Wistron, and Samsung have contributed to the success of the PLI scheme, a senior executive from Lava emphasised the need for more time to establish local champions in the manufacturing industry.

Lava, which fell short of its production targets in FY23, remains optimistic about meeting its goals for FY24 due to resurgence in its brand and increased government procurement of smartphones from local companies, as stated by its co-founder SN Rai. However, companies like Bhagwati Products and Optiemus Electronics, subsidiaries of Micromax Informatics, are likely to miss their targets for the current fiscal year. Optiemus, in particular, has shifted its focus to expanding its presence in wearable and IT hardware, abandoning efforts to attract smartphone orders.

Bhagwati struggled to secure significant orders from Chinese smartphone brands due to limited capacities, low capital expenditure, and conflicts of interest arising from pursuing their own brands, according to industry experts. Despite the challenges faced by local players, global iPhone manufacturers such as Foxconn, Wistron, Samsung, and Pegatron are on track to meet their targets for FY24.

In response to these challenges, Rai of Lava called for the government to reconsider and extend the duration of the production-linked scheme beyond its original five-year timeline ending in FY26. He argued that the industry needs at least five more years to mature, especially since sub-assemblies and component ecosystem players typically wait three to four years before making significant investments. Rai stated that discussions are underway with industry associations to push for an extension of the scheme.

Source: Indiatimes