Govt eases norms, Apple's iPhone assembler Pegatron plans to set up plant in India

New Delhi: The government is likely to drop a clause of evaluating plant machinery for electronics manufacturing in the recently notified Rs 48,000 crore worth incentive schemes to ease shifting of base for companies like Apple and contract manufacturers to India, according to sources.

The Ministry of Electronics and IT (Meity) wants to go full throttle to capitalise on sentiments of the US, Japan, Taiwan and other nations looking to shift their companies' base out of China amid the COVID-19 crisis.

"Meity is likely to drop the clause to evaluate plant machinery and other capital goods at 40 per cent of the original value in the recently announced incentive schemes. The changes are likely to be notified in a day or two," a source said.

On April 1, the government notified three schemes comprising total incentives of around Rs 48,000 crore to boost electronics manufacturing in the country.

The electronics manufacturing companies will get 4 -6 per cent incentives based on certain incremental sales every year.

Apple's iPhone assembly partner Pegatron is also planning to set up a plant in India to take benefit of the new schemes. Pegatron will be the fourth partner of Apple to set its footprint in India after Wistron, Foxconn and Compal Electronics.

At present, only Wistron and Foxconn assemble iPhones in India.

Wistron has already announced to expand its operation by increasing the manpower by about 10 times to 20,000 people over the next 2 years with an initial investment of around Rs 2,000 crore.

Under the Production Linked Incentive (PLI) schemes, an electronic company has the potential to get an incentive of around Rs 7,500 crore if it scales up production to worth about Rs 1.5 lakh crore over next five years.

The government expects to generate manufacturing revenue potential of Rs 10 lakh crore and create direct and indirect jobs for 20 lakh people by 2025 through these schemes.