Apple suppliers miss India targets, calls for extended incentive program

Apple suppliers Foxconn, Wistron, and Pegatron have all reportedly missed on government-set targets.

What you need to know

• A report says that manufacturers in India are calling for an extension to a production incentive program in the country.
• Apple suppliers including Foxconn are all named as companies that have missed production targets due to the pandemic.
• India's government has successfully enticed many companies to the nation with generous subsidies provided that they meet production quotas.

A new report says that multiple companies have called on the Indian government to extend a production incentive program, as all but one have missed targets set by the scheme due to COVID-19.

From Economic Times:

Manufacturing companies have urged the government to push the five-year production-linked incentive (PLI) scheme timeline by a year and consider the current fiscal as zero year due to Covid-led disruptions that dragged the production output behind stipulated targets.

The India Cellular & Electronic Association (ICEA) has written to the government suggesting that FY 2020-21 should be treated as a year of preparation, but no incentive should be given for any incremental production this year.

The ICEA says that of 16 represented manufacturers only one, Samsung, has met targets set by the government. The remaining 15, including Apple suppliers Hon Hai (Foxconn), Wistron, and Pegatron "have failed to meet production targets. Reasons for the missed targets given include chip shortages, a 45-day lockdown in India, a short time given to expand capacity, and a lack of technical specialists from abroad because of visa constraints and travel restrictions. This includes restrictions on specialists from China. A more recent Digitimes report says that although seven of the 15 firms have reached "the lowest threshold of cumulative incremental investments by year-end 2020" and that more will have reached this by March 31, "none will be able to meet the minimum requirement for total sales of manufactured goods."

India's scheme to lure manufacturers to the country with promises of generous subsidies has seen Apple onshore lots of its manufacturing there. Last year it emerged the iPhone 11 was being made in India, the first time a flagship iPhone had been made anywhere outside of China.