Smartphone makers seek 30% incentive for component manufacturing in India

The incentive under M-SIPS for smartphone players should be raised to 30 per cent of the capital expenditure to help offset the loss of revenue faced by companies when they move a component manufacturing facility to India, industry body IAMAI said on Thursday.

The opportunity cost of starting a component manufacturing facility is the loss of revenue of around 5-9 months in the best case scenario and at worst, almost 2 years, the report said.

It added that if a global player decides to manufacture in India, the entity will lose revenue of at least 2-3 quarters against the better alternative of setting up or continuing in China or Vietnam.

The report, titled ‘Modified Special Incentive Package Scheme (M-SIPS) 2.0’, suggested that the M-SIPS incentive be raised to 30 per cent from 25 per cent of the capital expenditure to offset this loss of revenue.