Addressing concerns surrounding the delays in subsidy payments under the centre's Production-Linked Incentive scheme, Dixon Technologies Ltd.'s Executive Chairman, Sunil Vachani, said that the current lag is primarily a "technical issue" and that the company is hopeful of a swift resolution.
"We are part of five PLIs and so far, the payments under the scheme have been very regular," Vachani told NDTV Profit. "Currently, there is a technical issue that is being examined by the government, and we are deeply engaged with the Ministry of Electronics and Information Technology to resolve this...and we're hopeful of some solution soon."
This clarification follows a Bloomberg report that stated that companies including Foxconn Technology Group and Dixon Technologies were asking the government to pay them pending subsidies they think they are entitled to under PLI 1.0. Foxconn could get as much as Rs 600 crore and Dixon Rs 100 crore if the government releases the funds, according to the report.
PLI 2.0
Vachani further said that the electronics manufacturing industry is looking forward to a potential PLI 2.0 rollout, specially focused on components.
"After the success that we have achieved in the last few years, we now need to invest in design, backward integration and creating a strong and vibrant component ecosystem to ensure this is sustainable," he said.
To achieve the ambitious dream of a $5-trillion economy, the government has set a target of $500 billion in electronics production by 2030, including $100 billion in exports, by providing manufacturers with various incentives.
Between April and November 2024, electronics exports reached $22.5 billion in value, growing 28% over the $17.6 billion electronics exports during the corresponding period of FY24. Smartphones led the growth, boosted by the PLI scheme. Domestic demand, however, remained muted.
Categories such as televisions and washing machines have particularly degrown in the last 12-18 months, Vachani said. "Hardly 15% of the people in India own products like washing machines or LED TVs. And with these penetration levels, we should be looking at hyper growth, and for that to happen we need to make these products affordable."
Moreover, the slowdown in urban markets have impacted sales. Vachani is hopeful of a consumption stimulus in the upcoming Budget will drive demand, reversing the trend.
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