Foxconn, Flex and Wistron, which together make the bulk of the smartphones sold in India, are closing operations, government and industry officials said.
“At present, we have a turnover of between Rs 500 crore and Rs 700 crore per day. So, a shutdown for about three weeks essentially means a loss ranging between Rs 10,000 crore and Rs 15,000 crore,” Pankaj Mohindroo, chairman of the Indian Cellular & Electronic Association of India, told ET.
The association represents smartphone manufacturers such as Apple, Lava, Oppo and Vivo.
Foxconn, Flex and Wistron, three of the world’s top contract manufacturers and also the biggest in India, didn’t respond to ET’s emailed queries.
Government officials said smartphone makers would need to adopt models from Korea and Taiwan to emerge from the crisis once normalcy returns.
The government is monitoring the situation very closely and is in touch with all electronic manufacturers.
“As and when production starts, there will be a lot of rush at the ports, so we will intervene at that period to ensure smooth transition to resuming production on full scale,” an official said.
The official said the government had just approved the mega Production Linked Incentive (PLI) scheme along with two others to boost electronic manufacturing in the country. ET was the first to report about the scheme in the February 4 edition.
“That is the silver lining in the dark clouds right now as we know once the lockdown is lifted and we are past the Covid-19 phase, the entire stimulus from the government to boost electronic manufacturing will be in place for companies to avail,” the official said.
The Cabinet approved a Rs 48,000 crore package on March 21 to boost smartphone manufacturing in India. About Rs 41,000 crore has been earmarked for the PLI scheme and the remainder is almost equally divided between the Scheme for Promotion of Manufacturing of Electronics Components and Semi-Conductors (SPECS) and the Electronic Manufacturing Cluster 2.0.
“We are currently working on the draft guidelines,” the official said, while clarifying that despite the halt in manufacturing, companies should be able to avail of the benefits, especially the PLI scheme.
The PLI scheme offers an incentive of 4% to 6% on incremental sales over a base year of goods manufactured in India and covered under target segments for a five-year period.
A production loss at this stage will actually make it easier for the companies to make up in next few months, the officials said.
“The baseline is getting depleted for the companies – in a way, this helps them. They have been losing from January onwards. So, we expect them to be in full swing at least from August and only August 2020 to March 2021 production will be compared against August 2019 to March 2020 production,” the official said.
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5 Comments on this Story
Chintan Jhunjhunwala288 days ago
All industries are under lockdown . Once the lockdown is lifted and industries start producing full time there will be a transportation logjam with all that backlog to clear
Dilip 296 days ago
...and in the meantime of lockdown for 300 millions China will pileup bumper stock to reap the markets. Again when the world economy struggles back to normalcy China soars.
Hemant Khattar296 days ago
It means public save 15000 crore of money.