Samsung produces a significant fraction of its flagship smartphones in India. The company manufactures some of the components in Indian factories. It exports the rest from the other parts of the world. AMOLED panels are the components that the company imports from its other factories around the globe. The company didn’t have to pay any taxes in India. It was the reason for the low costs of Galax S9 and Note9 in India.
India’s Phased Manufacturing Programme (PMP)
Samsung may cease the production of flagships in India, and reduce the smartphone exports from India if the Indian government doesn’t rethink its recent actions. Besides that, the main issue with the Indian government is the implementation of India’s Phased Manufacturing Programme (PMP). While the law was due for the claim in March 2020, the Indian government is speeding it for the February of 2019. According to the law, the Indian Government will impose a 10% duty tax on any imported component in India.
Samung AMOLED Displays retains 25%-30% cost
As now we know that Display is the product that Samsung imports from its other plants. It’s also the most costly product in Samsung Flagships. Besides that, the AMOLED in Samsung Flagships retains 25%-30% of the cost of a phone. Heavy taxes and import duties will increase manufacturing costs in India.
Samsung’s Writting to Indian Government
Samsung India did make a decent reply on this to the Indian Government in the form of a letter. In saying, Samsung says that it will need to stop manufacturing flagship phones in the country. Also, the company will need to reduce the manufacturing of mid-range and entry-level smartphones in the country.
Besides that, S
Samsung Ceased TVs prodution in India – Already
Note that, the company has had already ceased the production of making TVs in India in the past quarter. The action was in reply for the new 5% duty on open cell LED panels and imports finished sets from Vietnam.
Samsung is a massive technology. The Indian Government is now trying to lift the taxes and re-think on the strategies.