New Delhi: Union Minister Ashwini Vaishnaw has strongly responded to former RBI governor Raghuram Rajan's recent critique of India's mobile phone manufacturing strategy under the Production Linked Incentive (PLI) plan. Vaishnaw dismissed Rajan's remarks as "shadow-boxing" and suggested that Rajan either remain an economist or transition into politics.
In response to Rajan's assertion that India is merely assembling mobile phones and not deeply manufacturing them, Vaishnaw asserted that the country is poised to contribute over 30% value to its electronics production sector within the next two years. He emphasized that India is set to produce essential components for mobile phones globally through three key businesses. Vaishnaw outlined that the manufacturing process across countries generally involves phased integration, starting with Completely Knocked-Down (CKD) components, then Semi Knocked-Down (SKD), and finally assembling the end product. He noted the intricate nature of the global electronics supply chain, where a value addition of more than 40% is rare.
Addressing Rajan's criticism, Vaishnaw expressed disappointment in the economist-turned-politician's approach, suggesting that Rajan's expertise could be better utilized as an economist or politician rather than engaging in "shadow-boxing." He urged Rajan to consider his roles more thoughtfully. In a recent interview, Rajan had voiced skepticism about the efficacy of the PLI scheme, claiming it primarily involves assembly rather than substantive manufacturing. The PLI scheme for mobile phones, launched on April 1, 2020, provides incentives of 4 to 6 per cent on incremental sales of mobile phones manufactured in India over a five-year period for eligible companies.