Exciting Developments in Mobile Phone Production Incentives

The **government** is currently exploring enhanced incentives for companies that have consistently surpassed their production, sales, and export goals for **mobile phones** each financial year under the **mobile phone production-linked incentive (PLI)** scheme, as reported by **ET**.

Companies Seek Additional Incentives

A senior official from the government shared with **ET** that several companies have been diligent in meeting their targets within the PLI framework and are now requesting additional incentives as a sign of “good faith.” The official emphasized, “The decision on disbursement for production exceeding ceiling limits is currently under consideration at the empowered committee level. We are keen to find the best approach and hope to resolve this soon.”

The PLI Scheme at a Glance

Initially launched on April 1, 2020, the PLI scheme for large-scale electronics manufacturing offers an incentive ranging from **4% to 6%** on incremental sales compared to the base year. While it was originally set to last until **2024-25**, the scheme has been extended by an additional year to support companies that struggled to meet production targets due to the COVID-19 pandemic.

Current Participation in the PLI Scheme

Out of **32 approved companies** under the PLI scheme for mobile manufacturing, **seven** are embarking on greenfield projects, whereas the remaining **25** are established brownfield projects. Under the PLI framework, companies are entitled to claim additional incentives a year after they have met their production targets. Those achieving their production and incremental sales targets enjoy a **6%** incentive in the initial two years, reducing gradually to **5%** in the third and fourth years, and down to **4%** in the fifth year.

Road Ahead and Production Success

The cabinet had initially projected a staggering production value of **Rs 8.12 lakh crore** over the five-year duration of the mobile phone PLI scheme, with a target of **Rs 4.39 lakh crore** by **March 2024**. However, as of March 2024, **internal estimates** revealed that the production value for all eligible companies had already surpassed expectations, reaching a remarkable **Rs 4.8 lakh crore**.

For the current fiscal year, the government has set a production goal of **Rs 6.50 lakh crore**, achieving nearly **80%** of this target thus far, according to estimates seen by **ET**. An official noted, “The demand for finished products in the domestic market has exceeded our projections. Almost all companies have successfully met their PLI-export targets as well.”

Export Milestones

The cabinet estimated total exports during the five-year span of the PLI scheme to be around **Rs 4.87 lakh crore**, designating **Rs 2.63 lakh crore** as the target until March 2024. Remarkably, exports under the PLI scheme reached nearly **Rs 2.5 lakh crore** by March 2024. As the fiscal year continues, the export target has been set at **Rs 3.9 lakh crore**, with companies under the scheme having already exported worth **Rs 2.6 lakh crore**.

Investments on the Rise

By June, mobile phone manufacturers and producers of specified components under the PLI scheme had collectively invested around **Rs 8,300 crore**, surpassing the cabinet’s initial target of **Rs 7,000 crore** for the **five-year** duration of the program.

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