South Korean tech giant Samsung has said that it may slow down the process of manufacturing in India unless the government doesn’t alter its decision to prepone the Make in India plans to manufacture locally.
According to a report by The Economic Times, the Indian government has advanced the Phased Manufacturing Programme (PMP) in India to February 2019 which aims at promoting the manufacturing of local components in India. This move will force big companies like Samsung to setup their own component manufacturing unit which in no way is economically viable for them.
Samsung has informed the government that it will halt the manufacturing of some of its models in India if the government doesn’t restructure its policies.
Samsung is currently in the process of setting up its own manufacturing unit in India to make AMOLED displays for its phones. Since the facility will only be operational by 2020, the government’s move to prepone its PMP has jolted Samsung’s big bosses.
According to the PMP, starting February 2019, any company manufacturing in India will be levied 10 percent import duty that could go up to 11 percent on imported components.
Samsung says it isn’t ready to start the manufacturing of components so soon which is why it has opposed this move by the government and said that it will not manufacture its flagship devices in India if the plans go ahead as they are.
Currently, the display panel of a phone accounts to 25-30 percent of the total production cost of the phone. A rise in import duty of these components will subsequently lead to an increase in the manufacturing costs which will have to be borne by the consumers, when the product goes on sale.
This move could also reduce the production of mid-range and entry-level phones as well.
Samsung is currently focused on the launch of its upcoming flagship the Samsung Galaxy S10 which is going to debut on 20 February this year.
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