Samsung opts out of India's PLI for telecom gear – report

News Analysis Gagandeep Kaur, Contributing Editor 6/21/2021

In a setback to India's Production Linked Incentive (PLI) scheme, it's been reported Samsung has decided not to participate.

Samsung was a major beneficiary of the PLI for mobile device manufacturing. It has manufactured mobiles in India since 2007, and it runs the world's largest mobile phone plant, in Noida in northern India.

It is also the only company to exceed investment and output goals for PLI in the first year ending March 2021.

Fly the flag: India's PLI scheme is designed to make the country a center for kit and handset manufacturing.
(Source: Naveed Ahmed on Unsplash)

However, the company is not keen to make additional investment for the PLI for telecom networking equipment because it has only one customer, Reliance Jio, in the country.

Setting up a manufacturing unit in India means an investment of around INR10 billion (US$134 million), and Samsung is not ready to do this with just one customer, when the company has manufacturing units in Vietnam and South Korea.

What further explains Samsung's decision is that it doesn't have to pay any import duty to get the gear from the other manufacturing units.

High hopes

The government recently started inviting applications for the scheme. It is designed to position India as a manufacturing hub for telecom equipment.

It's hoped that the PLI for telecom gear will result in production of around INR2000 billion ($26.98 billion) over the next five years.

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Further, the government is aiming to provide incentives of INR121.95 billion ($1.6 million) in the next five years with a target investment of around INR30 billion ($404 million) through this scheme.

Finnish telecom vendor Nokia and India's HFCL have already confirmed their participation. Media reports suggest that Ericsson is also likely to further invest in India as part of the PLI initiative. Dixon, which has recently tied up with Bharti Airtel, has made its intention clear to apply. These firms are already running manufacturing units in India.

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— Gagandeep Kaur, contributing editor, special to Light Reading