India is offering smartphone component manufacturers new incentives to increase production and to encourage companies to increase spending in the fast-growing industry.
Prime Minister Narendra Modi wants to transform the country into the world's next manufacturing hub. So far, 16 domestic and international companies have joined the program. These include Samsung, Apple suppliers Pegatron, Wistron and Foxconn and Australia's AT&S.
According to the Ministry of Electronics and Information and Technology, participating companies must reach a threshold of production increase to get incentives. Those that do will get around 4% to 6% of the sales of certain products over the next five years.
The ministry says the program will bring in more than 110 billion rupees ($1.5 billion) in new electronics manufacturing industry spending. It will accelerate the growth of the country's smartphone components manufacturing industry. Data published by the India Cellular and Electronics Association estimated the industry was likely now worth more than $230 billion.
While most companies haven't said how much they will spend, sources claim Foxconn, Pegatron, and Wistron are planning to spend up to $900 million over the next five years.
Apple will likely take advantage, too, to accomplish its India ambitions. It has only 2% of the country's smartphone market now. By increasing local production Apple could potentially sell its products in the country at a much lower price.
Thanks to India's measures, smartphone makers have started to shift some production to the country. In 2018, Samsung opened what it claimed was the "world's largest mobile factory" in New Delhi. Apple shifted a portion of its manufacturing to India in 2017. China smartphone maker Xiaomi currently has three component facilities in India.
