Apple products are produced by Foxconn and Dixon Technology Group. Now subsidy is being demanded from both these companies. Actually, under PLI scheme, subsidy is being offered to the companies by the government. They were to get subsidy under the government’s production incentive program. Now the companies are also demanding this from India.
The government had promised subsidies worth Rs 410 billion ($4.8 billion) to companies, but a part of it has not yet been allocated as some companies failed to meet projected production targets, ET reported. According to sources, Foxconn and Dixon say they are eligible for some portion of this unallocated fund as per the rules of the program. If the government releases funds, Foxconn may get about Rs 6 billion and Dixon may get Rs 1 billion. However, this matter is not public, so this information has been kept anonymous.
The government is reviewing the requests of these two companies. Representatives of Foxconn, Dixon and India’s technology ministry did not comment on the matter. Prime Minister Narendra Modi’s Production-Linked Incentive (PLI) scheme had set annual price-based targets for global and local electronics companies, capped at certain levels. The scheme also had a provision that if some companies did not reach their targets, their unutilized subsidy funds would be allocated to eligible applicants who had exceeded their targets.
Foxconn and Dixon’s performance:
Foxconn crossed the Rs 300 billion mark in iPhone production in the financial year to March 2023, exceeding its target of Rs 200 billion. Dixon projects production of Rs 80 billion by March 2024, higher than its target of Rs 60 billion.
Although this unallocated fund issue is relatively small in terms of amount, it is an important test of the industrial policy ambitions of the Modi government. Companies want the government to enforce rules that have encouraged large-scale investment in India. For example, Apple’s partners assembled $14 billion worth of iPhones in India last fiscal year. South Korea’s Samsung Electronics Company has also taken advantage of this scheme to boost its exports.
The stability of India’s policymaking assumes significance as the country seeks to attract chipmakers and tech giants, such as Microsoft. These companies are planning to invest in cloud computing and artificial intelligence.