Electronics major Samsung might move part of its smartphone production to India from Vietnam and other countries. The South Korean company is planning to produce devices worth over $40 billion or Rs 3 lakh crore in the country. Samsung is finalising its plans.
A person in the know said that the company is likely to diversify its production lines to make smartphones under the Production Linked Incentive (PLI) scheme. This move would have an impact on existing operations in other countries including Vietnam, as mentioned in a report in The Economic Times.
Vietnam is one of the largest exporters of smartphones, after China. As per the daily, Samsung has submitted an estimate to the government to make smartphones worth $40 billion in the next five years under the PLI scheme. Phones with factory price of $200 or below Rs 15,000 would account for over $25 billion. An official told the daily that most of the phones in this category would be exported.
Samsung makes nearly 50 per cent of its phones in Vietnam. Since labour costs are high in South Korea, it is in the process of winding down manufacturing in the country. Samsung has bases in Brazil and Indonesia too.
If Samsung's plans follow through, it will join smartphone major Apple in moving a key part of its productions to India.
In a recent press conference, communications and IT minister Ravi Shankar Prasad said that the PLI scheme has received overwhelming response from domestic and international electronic component manufacturers. "A total of 22 companies have filed their applications under the PLI Scheme. The benchmark for international mobile phone manufacturing companies was to manufacture mobile phones worth Rs 15,000 and above, whereas there wasn't any such benchmark for the domestic companies. We welcome Apple and Samsung to India. Domestic companies - Lava, Micromax, Padget Electronics, Sojo - are welcome to go ahead," said the minister.
The global smartphone export market is estimated around $270 billion, out of which Apple has 38 per cent market share and Samsung 22 per cent by value. When it comes to volume, Samsung has 20 per cent and Apple 14 per cent.