Six states woo mobile phone manufacturers with incentives and attractive subsidies

New Delhi: Six state governments are in the race to attract mobile phone makers to set up plants by offering incentives and subsidies over and above the central government's product-linked incentive (PLI) scheme. Of especial interest is Pegatron, Apple's second-largest contract manufacturer, which is yet to set up a plant.Uttar Pradesh, Andhra Pradesh, Telangana, Karnataka, Tamil Nadu and Maharashtra are wooing the 10 companies that have been enrolled under the government’s Rs41,000 crore PLI scheme, aimed at boosting local manufacturing for the domestic and export markets. 77363005Uttar Pradesh has already written to both Pegatron and Apple, highlighting its offer of 20% added incentive on capital invested and 25% subsidy on land. It is also wooing Samsung.“We have written to both Pegatron and its parent Apple about the state government’s scheme,” said Siddharth Nath Singh, minister for MSME and export promotion. “We are also hopeful about Samsung expanding in Noida since it already has a plant in the region.”Tamil Nadu’s chief minister has also written to Foxconn and Samsung, which already have plants in the state, as well as new entrants Wistron and Pegatron, inviting the companies to set up shop.Samsung has manufacturing units in Noida and Sriperumbudur. “Tamil Nadu already has a very attractive electronics manufacturing policy and we also offer special incentives to individual companies based on their needs,” a state official said. “Discussions are ongoing with all these mobile manufacturing companies since the very beginning when the PLI scheme was announced by the Centre.”Apple contract maker Wistron has appointed a hiring agency for recruiting 3,500 workers, 95% of them women, for its unit in Karnataka’s Kolar district while Foxconn has bulk openings in its Sriperumbudur factory, where it manufactures smartphones for Apple and Xiaomi in the state. Andhra Pradesh has some of the largest phone manufacturing plants, including also those of Foxconn, which makes for Apple, besides Nokia-branded phones and Gionee, in the state. It expects Lava and Micromax to enter the state. As per its policy document, the state is offering 25% rebate on land cost limited to Rs10 lakh per acre, capital subsidy of 10% on total investment up to Rs5 crore, power subsidy for five years, reimbursement of stamp duty, transfer duty and value-added tax for 10 years of operation.India’s youngest state Telangana, which hosts Indian phone brand Micromax’s factory, is offering 20% capital subsidy subject to a ceiling of Rs 10 crore, 25% power subsidy for three years or Rs 30 lakh, whichever is earlier, reimbursement of stamp duty and patent filing costs among other sops.“What sets Telangana apart from other states is that our ease of doing business (EoDB) ranking is very high and the government takes full responsibility of training the manpower required by the company,” said Jayesh Ranjan, principal secretary, industry and commerce. Telangana is second only to Andhra Pradesh in EoDB ranking.The PLI scheme will award graded incentives of 4-6% to five global companies--Rising Star, Hon Hai, Wistron, Pegatron and Samsung--and five Indian ones--Lava, Dixon, Padget Electronics, Sojo and Optiemus. Rising Star and Hon Hai are both Foxconn units. They didn’t respond to ET’s queries.The companies have committed an investment of Rs11,000 crore, and are expected to produce goods worth Rs 11.50 lakh crore in five years, of which 60% will be exported, creating direct employment for 300,000 people and three times that in terms of indirect employment. It’s expected to lead to 35-40% domestic value addition in smartphones from 10-15% now, according to the central government.

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