Lava to decouple production arm to boost PLI targets and attract new business

economictimes.indiatimes.com:

Domestic smartphone brand and contract manufacturer Lava International plans to decouple its production arm from the company to onboard business from other handset brands and help meet targets under the production-linked incentive (PLI) scheme for smartphones.

But the company, which has never been able to meet its PLI smartphone targets since the scheme began in 2020-21, is hopeful of a turnaround in its manufacturing fortunes with the upcoming incentive package for component production, head of manufacturing, Sanjeev Agarwal, told ET. «Lava's performance in the ongoing PLI scheme is an internal concern, and we are working on plans to bridge the gap,» Agarwal said.

The company veteran added that the challenge was to increase production by Rs 500 crore every year by either growing Lava's market share or supporting manufacturing for other brands.

Agarwal pinned its failure to meet smartphone PLI targets on starting with a higher base that made incremental targets more difficult for Lava than others who started their manufacturing journey with the onset of the scheme.

The company also could not benefit from the government's push towards Chinese smartphone brands working with PLI-eligible domestic firms for meeting local demand and exports, as rival brands have policies in place to not partner with manufacturers who also operate their own brand, Agarwal said.