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Lava International to shift mobile phone manufacturing, R&D from China to India, to invest ₹800 crores in next 5 years

The decision by the Lava company comes at the backdrop of the Production Linked Incentive Scheme (PLI) announced by the Union Government in April, amidst the Coronavirus lockdown

The Indian mobile handset manufacturer, Lava International, has announced that it will shift its Design, Manufacturing, Research, and Development (R & D) hub from China to India in the following 6 months. The company will also invest ₹80 crores within the next 5 years in the Indian market and a total of ₹800 crores over the following 5 years. This move will give a major boost to union govt campaigns such as ‘Make in India’ and Prime Minister Narendra Modi’s ‘Local me liye Vocal’ initiative.

The decision by the Lava company comes at the backdrop of the Production Linked Incentive Scheme (PLI) announced by the Union Government in April, amidst the Coronavirus lockdown. Under the scheme, an incentive of 4-6% will be extended to incremental sales of goods that are manufactured in India for a period of 5 years. The increment will be subject to the base year of sales. The purpose of the scheme was to provide a level-playing ground to the domestic companies.

Official Statement by Lava

According to Chairman and Managing Director of Lava, Hari Om Rai, the production linked incentives would help the company overcome ‘manufacturing disabilities’ to a large extent. He added, “We have been eagerly looking forward to an opportunity to shift our entire mobile R&D, design, and manufacturing from China to India.”

Lava which reportedly exports 33% handsets to Mexico, West Asia, and Southeast Asia also manufacture and customises products of other companies. While the Indian mobile phone market is dominated by Chinese and Korean phones, Indian Companies like Micromax, Intex, Lava, Karbonn etc are still operating in the market, mainly in the feature phone and low-end smartphone segments. While most Chinese and Korean firms have already moved their production to India in the last 5 years to cater to huge domestic demand, Indian firms are still using facilities in China to make their phones due to cost advantages. But with the changed global scenario after Coronaviurs, not these manufacturers have also now started to move their productions to India.

The mobile handset industry suffers from 8.5-11% disability, inadequate infrastructure, limited design capabilities, and inadequate skill development, besides poor quality power, According to the Ministry of Electronics and Information Technology.

Korean firms interested in India

Earlier, Korea Chamber of Commerce and Industry (KCCI) chairman Yongmaan Park, seeking to move investments out of China, had shown interest to invest in Uttar Pradesh, stated State MSME and Export promotion Minister Sidharth Nath Singh, amidst the Wuhan Coronavirus pandemic. Park added that other industrialists and electronic makers from Korea were also interested in exploring investment opportunities in the State.

 

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