Preparation to defeat China and save $30 billion exports! Is the government bringing PLI 2.0 for smartphones? What is the plan?
Know the main points and gist of the news at a glance
New Delhi The government is considering introducing PLI scheme 2.0 (smartphone PLI 2.0 India) for the smartphone sector, as the existing Production Linked Incentive (PLI) scheme is ending on March 31.
In view of the changing global situation, tariff relief given to China and India's cost challenge, the government may make an exception for giving incentives for the second time.
Generally, PLI scheme is for a single round and is not extended after it ends. But according to officials, the government is reviewing the situation with an 'open mind' in the case of the smartphone industry. An official said that the situation is changing rapidly, so general rules cannot be applicable to every sector.
Remove fentanyl tariffs imposed on China
Recently, the fentanyl tariff imposed on China has been reduced to zero (China tariff relief fentanyl). This has reduced the competitive edge of Indian companies. On the other hand, after the US Supreme Court's decision to abolish global tariffs, the edge that India had over China has also weakened.
Also read- Trump imposed 10% tariff on the world, big announcement 3 hours after SC decision; What did you say on India-US trade deal?
China has a strong supply chain
However, the difference in India's manufacturing cost compared to China was earlier 18-19%, which has now reduced to 11-14%. Still, without government incentives, it is difficult for Indian companies to compete. China has a strong supply chain and advanced manufacturing system, whereas India is still developing in this direction.
Talks with many companies including Tata, Apple
The government has informally held talks with several companies, including Foxconn, Tata Group, Apple, Samsung, Dixon Technologies, Lava International and Bhagwati (Micromax). The government says that the decision will be taken according to the needs of the industry.
Smartphones become India's largest export sector for the first time in 2025. Total exports were $30.13 billion, in which Apple's share was 76%. America is the largest market for Indian smartphones. Earlier, automotive diesel fuel was the largest export product.
The scheme may be implemented from April 1
If the new scheme is approved, it will have to be implemented from April, as the current scheme ends on March 31. Provision for this will also have to be made in the budget, because incentives under PLI are given after the target is achieved.
There are three big concerns before the government. The rapidly growing sector should not suffer any setback (India vs China manufacturing cost), competition from China should remain and investments worth thousands of crores should remain safe. Now the decision is on whether India will be able to maintain its export lead with PLI 2.0?