Dixon and Foxconn Call on Government to Pay Off Outstanding Subsidies

Nitin Konde, Varun Bhardwaj

Jan 10, 2025 — 2 min read

Dixon and Foxconn Urge Government to Clear Pending Subsidies

According to reports, electronics companies Dixon Technologies and Foxconn have pleaded with Indian authorities to pay INR 700 Cr in outstanding debts. The payments relate to the subsidies covered by the Centre's production-linked initiative (PLI) program that the two Apple vendors are eligible to receive. According to a media citing, if the government makes the money available, Foxconn might get up to INR 600 Cr, while domestic Dixon might earn INR 100 Cr. Authorities are allegedly examining the two requests at this time, according to sources. Even though the Centre has allotted more than INR 41,000 Cr for the smartphone PLI scheme, certain companies have not yet received their share of the subsidies since they have not met their production targets.

What the Argument is All About?

Dixon and Foxconn have both maintained that they qualify for a portion of the unallocated funding. According to the report, Foxconn produced iPhones valued at INR 30,000 Cr in the fiscal year 2022–2023 (FY23), which is significantly more than the INR 20,000 Cr benchmark set by the government. In FY24, Dixon, a domestic company, produced cellphones valued at INR 8,000 Cr, surpassing the INR 6,000 Cr goal. Electronics manufacturers are eligible for subsidies under the INR 41,000 Cr PLI scheme if they surpass specific yearly value-based limits. Additionally, the program gives eligible applicants who surpassed their predetermined output any unused subsidies that were due to applicants not reaching their set goals.

Government has Put Scanner on Dixon

Dixon's case, though, seems to be a complex one. The Centre is allegedly investigating whether the domestic electronics maker invested in new ventures to produce Xiaomi smartphones or if "machines were merely shifted out of another factory" that had previously put together the Chinese brand's products. This occurs as a growing number of multinational industrial titans are heading straight for India to take advantage of the benefits and incentives provided by the Indian government through its numerous PLI programs. Samsung likewise rapidly increased its production in India, even as Apple manufactured $14 billion worth of iPhones there in FY24.

An Important Test for Modi Government

Modi's industrial policy aspirations are put to the test in the unallocated funds issue, despite the comparatively little amount of money at stake. As they diversify beyond China, businesses want to see the administration implement the policies that have resulted in large investments. For example, Apple partners assembled $14 billion worth of iPhones domestically during the previous fiscal year. Samsung Electronics Co. of South Korea has also used the scheme to increase exports.

As India attempts to attract chipmakers and giant corporations like Microsoft Corp., which intends to invest billions in the most populous nation in the world to promote cloud computing and artificial intelligence, the stability of Indian policymaking becomes even more crucial.