Samsung Electronics has informed the government that it will reduce mobile phone manufacturing in India.
Samsung Electronics is likely to stop local production of flagship models – Galaxy S9 and Note 9 – and curtail exports of smartphones unless it delays a ‘Make in India’ plan for components such as display and touch panels. The consumer giant has informed the government about the same, reported Economic Times.
The government advanced the Phased Manufacturing Programme (PMP) timetable by two months in an order earlier this month. Instead of starting local manufacturing of the components anytime in 2019-20 as stated earlier, the government now wants companies to begin in February 2019 or face 10 per cent import duty, which would go up to 11 per cent with a surcharge.
ET reported that the industry, including Samsung, had earlier inferred that they can start manufacturing these components anytime by March 31, 2020, as stated in the PMP and hence had planned their investment accordingly.
Samsung said it’s in the process of setting up a display assembly plant for mobile phones at an outlay of $100 million that will be operational by April 1, 2020. The unit will be able to produce Amoled screens.
The world’s largest smartphone maker has also said it will have to shelve its plans to increase exports of mobile phones from India to “more than 40 per cent in 2019” from “15 per cent of the total production” now since it will become unviable. “India-made mobiles will not be able to compete with the costs of low-cost manufacturing economies like Vietnam,” it has written. Samsung India didn’t respond to queries.