Leading home-grown companies — Dixon Technologies (India), Amber Enterprises India, Tata Electronics, Chennai-based Munoth Industries, and Murugappa Group — along with global majors such as Japan’s TDK Corporation, Taiwan’s Hon Hai Technology Group (Foxconn), Austria’s AT&S Austria Technologie & Systemtechnik AG (AT&S AG), and Japan’s Murata Manufacturing Co, among others, have expressed initial interest in participating in the Rs 22,919 crore production-linked incentive (PLI) scheme cleared by the Union Cabinet, according to those privy to stakeholder discussions with the government.
The scheme envisages investments ranging from Rs 50 crore to Rs 1,000 crore across different segments of electronic components, with the highest being in printed circuit boards (PCBs) and passive parts like capacitors, among others.
While the fine print is yet to be released, the average incentive (which will be offered in different ways) is expected to exceed 5 per cent on an estimated production of Rs 4.56 trillion generated from the scheme.
Electronic manufacturing services player Dixon will focus on three segments, according to a senior executive of the company — display modules, camera modules, and mechanicals — with an expected collective investment of Rs 800 crore.
It has already formed a joint venture (JV) with Chinese company HKC Co., in which it will hold a 74 per cent stake, for display modules.
Delhi-based Amber will apply for manufacturing PCBs and has already entered a JV with Korean Circuit, in which it will have a 70 per cent stake.
Jasbir Singh, chairman of Amber, says: “We will be investing around Rs 1,500 crore to Rs 2,000 crore to build scale.
"The total demand for PCBs in the country last year was Rs 32,000 crore, and only 10 per cent was made in India.
"So, there is a huge market for many players to enter.”
Singh adds that while the fine print is yet to be released, discussions suggest that the government is looking at offering up to 25 per cent as an upfront capital subsidy on the project cost and about 28 per cent of the production value over five years.
Joining them in this space is AT&S AG, whose Indian subsidiary is the country’s first and largest manufacturer of high-density and high-frequency PCBs, with a factory in Karnataka.
Murugappa Group has also been in talks to enter the sub-components space to manufacture camera modules, while Tata Electronics is looking at mechanical components, which it already supplies to Apple Inc and exports as well.
In lithium-ion battery cells, players that have shown interest include Amperex Technology, owned by Japanese giant TDK (which has already set up a plant and is supplying to Apple Inc), and Munoth, which is manufacturing battery cells at its factory in Tirupati.
Jaswant Munoth, vice-chairman of Munoth, says: “We will participate in the PLI scheme.
"We have already invested Rs 165 crore and are planning further expansion.
"Apart from the local market, we hope to export as well.
"With a 45 per cent tariff on China by the US, we would be at an advantage.
"However, we will know in April what the reciprocal duty on India will be (which is currently zero in the US).”
In passive components, which include resistors, capacitors, and inductors, discussions have already taken place with companies like Japan’s TDK, US-based Texas Instruments, and Japanese behemoth Murata regarding setting up capacity.
Foxconn, the largest vendor for assembling Apple iPhones, has been looking to increase its component play.
It has expressed interest in multiple areas, including camera modules, display modules, and mechanical components, among others.
The PLI scheme is envisaged for six years and is focused on creating a domestic supply chain that can support companies in India while also enabling exports worldwide.
This will help increase localisation in finished products, which remains low — 12–18 per cent for mobile devices.
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