Good morning [%first_name |Dear Reader%],

Turning India into a global manufacturing hub—especially for electronics—has been a deeply held desire of the Indian government for a long time. But in 2020, it kicked things up a notch with the rollout of Performance-Linked Incentive (PLI) schemes to encourage domestic manufacturing. 

In the three years since, several of these schemes have been launched for many sectors (telecom, steel, lighting, AC components, batteries, mobiles, IT hardware, etc), and more are in the pipeline. 

Now, with Reuters reporting last week that tech giant Apple is planning to set up a US$200 million Airpods plant in India, government sources tell me that hearables is one of those sectors that’s set to see a PLI rollout very soon. 

A PLI for your ears

According to Reuters, contract manufacturer Foxconn has won Apple’s order to manufacture Airpods, and is looking to set up a plant for this somewhere in India. Production is reportedly planned to start by the end of 2024. Airpods are likely an over US$20-billion revenue stream for the company, according to several analyst estimates, with a global market share of over 30%, as per market research firm Canalys. 

Apple bringing its manufacturing infrastructure for the product to India will, no doubt, be a pretty big boost to the country’s rather ambitious electronic manufacturing targets. India aims to make US$300 billion worth of electronics by 2026.

The PLI schemes, as I indicated earlier, are a key cog in the government’s plans to get to that target. The electronics ministry actually has a vision document for this goal, which is quite clear how it plans to go about it. 

In short, the strategy is to identify more and more specific segments inside the electronics basket, and target them with incentives.