Lava International, a domestic smartphone brand and contract manufacturer, plans to separate its production arm from the main company. This move aims to attract business from other smartphone brands and help meet targets under the production-linked incentive (PLI) scheme for smartphones.
Lava has struggled to meet its PLI targets since the scheme started in 2020-21. However, the company is optimistic about improving its manufacturing with a new incentive package for component production. Sanjeev Agarwal, head of manufacturing, said, “Lava’s performance in the ongoing PLI scheme is an internal concern, and we are working on plans to bridge the gap.”
Agarwal explained that the challenge is to increase production by Rs 500 crore each year. This can be done by either growing Lava’s market share or by supporting manufacturing for other brands. He also mentioned that Lava’s higher starting base made it harder to meet the incremental targets compared to others who started manufacturing with the scheme’s onset.
The company has also faced difficulties due to policies from rival brands. These brands avoid partnering with manufacturers who also operate their own brand, which has affected Lava’s ability to benefit from the government’s push for Chinese smartphone brands to work with PLI-eligible domestic firms for local demand and exports.
