Samsung investing $500 Million in India

As per new reports, Samsung has invested $500 Million in a display manufacturing facility in India. Samsung already has a manufacturing facility in Noida for manufacturing smartphones and the new facility will be set up on the same land. Samsung is currently the majority manufacturer of AMOLED panels in smartphones, supplying the component to Apple and many others and has often had struggled with meeting demands. With a new display manufacturing facility in India, Samsung should be able to greatly increase its output.

However, that is not the only benefit that Samsung is set to gain. The Indian Government had implemented the Phased Manufacturing Program (PMP) back in 2016, with the goal of encouraging smartphone companies to manufacture their devices in India, completely. To establish the facilities and infrastructure, the government had divided the target into yearly milestones. In 2017, the government expected OEMs to start manufacturing chargers, batteries and wired headsets, locally. The incentive for OEMs was the obvious reduction in taxes and duties, as the government increased the taxation on said components once the milestone was passed. OEMs are expected to manufacture display within India and should they fail to do so, import of the components will attract a 10% duty and a 1% surcharge. The display usually costs between 25-30% of the phone itself and hence, import would reduce the profits significantly.

In January 2019, the Government decided to move the timetable up by 2 months from March 2020, which led to severe backlash from Samsung. Samsung had declared that if the Government did not go back to the originally decided timeline for PMP, the company would be forced to scale back its smartphone manufacturing operations in India, and completely stop the manufacturing of its flagship devices.

Now, the company is readying to set up the facility as per the timeframe of the original Phased Manufacturing Program.


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