Union Cabinet OKs Rs 62,500 crore mobile phone scheme to boost local production
GS3Economy · S&T · Environment · Security· Industry, investment & MSMEs· Prelims + Mains·
Why in news
The Union Cabinet approved a ₹62,500 crore mobile phone manufacturing scheme to enhance domestic value addition and R&D in the electronics sector.
Background
The scheme is approved for a duration of five years with a total outlay of ₹62,500 crore. It builds upon the existing Production Linked Incentive (PLI) scheme which successfully raised local value addition to 24%.
Facts for Prelims
- FactTotal outlay for the new mobile phone manufacturing scheme is ₹62,500 crore.
- FactCurrent local value addition in the mobile phone sector stands at 24%.
- SchemeThe scheme provides an additional incentive of up to 1.5% for domestic sourcing of key components.
- SchemeAn additional incentive of 3% on eligible sales is provided for design and R&D by Indian brands.
- FactThe scheme is scheduled to be in force for a period of five years.
For Mains
Q. Discuss how production-linked incentive schemes contribute to India's goal of becoming a global electronics manufacturing hub and reducing import dependency.
Dimensions to cover in your answer
- Import substitution: Reducing reliance on Chinese components through localized sub-assembly production
- R&D ecosystem: Transitioning from 'assembly-only' hubs to high-value design and intellectual property creation
- Supply chain resilience: Mitigating global logistics shocks by strengthening domestic sourcing of critical electronic components
Keywords: Production Linked Incentive · Value Addition · Import Substitution · Make in India · R&D Incentives
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