Indian mobile company Lava lured by govt's new schemes exits China

Ever since the coronavirus pandemic has hit India, the economic slowdown has affected businesses in a big way. Not just India, but countries around the world are gripped by the economic crisis caused due to COVID-19, which originated in the Wuhan city of China. The pandemic has taught countries the importance of self-reliance and served as a reality check for how dependent each country is on China. A lot of international companies are seeking to exit China and shift to other countries.

India started acting to seize the opportunity and in April, the Indian government announced three schemes involving total incentives of around Rs 48,000 crore to boost local electronics manufacturing and create 20 lakh direct and indirect jobs by 2025. The new schemes attracted Indian mobile company Lava to shift its operations from China back to India.

Lava's homecoming

Lava International Chairman and Managing Director Hari Om Rai revealed that the company will move its product design team, consisting of around 600-650 employees, from China to India. The company, which used to partially export mobile phones from China to other markets such as Southeast Asia, West Asia, Africa, and Mexico, will now happen from India.

Additionally, Lava is planning to invest Rs 800 crore over the next five years to increase its mobile phone development and manufacturing in India. The move gives manufacturers a 6 percent cost advantage under the new production linked incentive (PLI) scheme.

"We have been eagerly looking forward to an opportunity to shift our entire mobile R&D, design, and manufacturing from China to India. With the production linked incentives, our manufacturing disabilities for the world market would largely be met hence we plan to make this shift," Rai said

With India looking as a suitable alternative for companies exiting China, it could help boost PM Modi's vision of local manufacturing under the "Make in India" scheme.