The Indian government announced a productivity-linked incentives (PLI) scheme[1] to attract electronics manufacturers to shift production to India. Apple Inc. is reportedly ready to shift some production from China to India[2] that may boost Indian exports by around USD 40 billion.
The Indian Ministry of Electronics and Information Technology said that the Indian electronics markets suffer from a “lack of adequate infrastructure, domestic supply chain and logistics; high cost of finance; inadequate availability of quality power; limited design capabilities and focus on R&D by the industry; and inadequacies in skill development.”
The PLI scheme does not require companies to invest in India’s infrastructure, but rather maintain a certain level and value of production. The lack of infrastructure, as well as a clause in the scheme that values the entire plant and machinery already in use in facilities across China and other places at 40% of that value, may deter certain companies.
India’s announcement comes as companies are moving to diversify supply chains and create some resiliency in the face of trade wars and a pandemic that has caused major disruption to global supply chains centered in China.