Foxconn and Dixon call for pending PLI subsidies under Make in India Initiative

Foxconn and Dixon Technologies push for unallocated subsidies under India’s Production-Linked Incentives scheme, supporting Make in India initiative and boosting local electronics manufacturing growth

Foxconn Technology Group and Dixon Technologies India Ltd., key suppliers for Apple Inc., are urging the Indian government to release billions of rupees in pending subsidies they believe they are entitled to under the Production-Linked Incentives (PLI) scheme, a crucial part of India's Make in India initiative. The government had committed Rs 41,000 crore ($4.8 billion) to promote local electronics manufacturing, but some funds remain unallocated due to several companies not meeting their estimated production targets. Foxconn and Dixon argue they are eligible to claim these unallocated funds under the scheme.

Foxconn and Dixon exceed production targets, now seeking subsidies

Foxconn, with its expanding Foxconn India operations, exceeded its Rs 20,000 crore cap, achieving Rs 30,000 crore in production in the fiscal year through March 2023. Dixon Technologies India also surpassed its target, producing Rs 8,000 crore worth of goods compared to a cap of Rs 6,000 crore. As a result, Foxconn is seeking up to Rs 600 crore, while Dixon is requesting Rs 100 crore from the unallocated subsidies. These requests are currently under review by Indian authorities, though neither Foxconn, Dixon, nor the Ministry of Electronics has commented publicly on the matter.

Role of PLI scheme under Make in India and electronics manufacturing growth

The PLI scheme, introduced by Prime Minister Narendra Modi to encourage electronics manufacturing in India, is central to the Make in India initiative. The program sets annual value-based thresholds for global and local manufacturers, with the goal of driving significant investments in the sector. Any unused subsidies are redistributed to companies that exceed their targets, further promoting growth in the industry. The issue underscores the Indian government's commitment to fostering an environment conducive to large-scale manufacturing, attracting major players like Apple, which localized $14 billion worth of iPhone production in India last fiscal year.

India’s industrial policy under scrutiny as global giants eye the market

The outcome of the Foxconn Dixon subsidy request will serve as an important test for India’s industrial policy and its efforts to attract more investments, especially in sectors like cloud computing and artificial intelligence, where global giants like Microsoft are expected to invest billions in the country.