Foxconn Technology Group and Dixon Technologies India Ltd., key players in India’s electronics manufacturing drive, have urged the government to release pending subsidies under the production-linked incentive (PLI) scheme. These subsidies, part of the Rs 41,000 crore ($4.8 billion) package, aim to encourage large-scale manufacturing in India but remain partially unallocated due to unmet production targets by some firms.
Foxconn is seeking up to Rs 600 crore and Dixon about Rs 100 crore from the unallocated pool, as per sources. Both companies argue they are eligible based on the scheme’s rules, which allow redistribution of unused subsidies to firms that surpassed their production targets.
Foxconn exceeded its cap with iPhone production valued at Rs 30,000 crore in FY 2023 against a threshold of Rs 20,000 crore. Similarly, Dixon produced goods worth Rs 8,000 crore in FY 2024, surpassing its Rs 6,000 crore cap.
The government is currently reviewing the requests, while concerns about compliance with investment requirements have emerged, particularly for Dixon’s production of Xiaomi smartphones.
This dispute highlights the importance of consistent policy implementation in attracting foreign and domestic investments. With companies like Apple and Samsung scaling up production and exports under the PLI scheme, timely disbursement of incentives is crucial to sustaining momentum.
The Modi administration’s approach to resolving this issue could impact India’s ability to attract further investments, especially as it seeks to position itself as a global hub for electronics and semiconductor manufacturing.
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