Rs 800 Crore Investment: Lava to Shift Operations From China to India

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  • Lava International is shifting its mobile R&D, design and manufacturing operations to India
  • The company plans to invest Rs 800 crore in India operations during the next five years

Lava International, citing the government of India’s production linked incentive (PLI) scheme has decided to shift its operations from China to India. The company plans to completely shift its mobile R&D, design and manufacturing operations to the country in next six months.

As part of the long-term plan, the India-headquartered mobile handset company will invest a total of Rs 800 crore in the next five years. It is to be noted here that Lava exports over 33 per cent of its phones to markets such as Mexico, Africa, Southeast Asia and West Asia.

“We used to have a 700-members team working on design and R&D in China. Now Lava does most of that work from India. The China team was working on designs of smartphones till now. But we have already started that entirely in India now,” Sunil Raina, president and business head, Lava, had told EFY recently.

Lava resumed operations with workforce of 600 individuals

The company has started operating with 20 per cent of its production capacity, post receiving an approval from the state authorities, recently.

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“We welcome government’s move to permit mobile phone companies to resume operations. Though, we might face some challenge due to the delayed availability of manpower & materials, we have sufficient inventory to maintain the pace of our production for the initial period,” Sanjeev Agarwal, chief manufacturing officer of Lava on resuming factory operations had said.

PLI scheme

In a bid to improve and strengthen the indigenous manufacturing of electronics in India, the government had approved the Production Incentive Scheme (PLI) for large scale electronics manufacturing. The scheme includes incentives for players manufacturing mobile phones in India. It also encompasses specified electronic components including assembly, testing, marking and packaging (ATMP) units.

The total cost of the proposed scheme, as informed by the government of India (GOI), is approximately Rs 40,995 crore. This figure includes an incentive outlay of approximately Rs 40,951 crore and administrative expenses of around Rs 44 crore.

Interestingly, India’s import of electronic products has been on a sharp rise since 2011. While the figures were around Rs One trillion in 2011, the same for the year 2019 stood at around Rs Four Trillion. Sourced from Statista, the report mentions that these imports included computer hardware, consumer electronics, electronic components and instruments and telecom instruments.

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