Samsung opts out of PLI scheme for telecom equipment

Image Credit: firstpost.com

South Korean multinational conglomerate Samsung has told the Indian government that it would not be taking part in the Production Linked Incentive (PLI) scheme for telecom equipment. According to the tech company, it would not be able to make the investments required for manufacturing in the country since it has only one customer in the Indian telecom market. The information was conveyed in a meeting with officials of the Department of Telecommunications(DoT) earlier this week.

However, it is understood that the senior level management at Samsung assured the government that it would take benefit of any such opportunity available in future.

Samsung has been working with Mukesh Ambani’s Reliance Jio, supplying it telecom equipment required for the company’s 4G network. Jio, which has already started testing 5G in Mumbai, had recently announced that it would work with equipment makers like Samsung to start 5G trials in various cities of India.

According to an executive at Samsung India, a greenfield manufacturing plant would require an investment of Rs.800-1,000 crore, for which the company doesn’t see any business need.

At present, the Seoul based company imports telecom equipment for Jio from its factories located in China, South Korea and Vietnam. India has free trade agreements with Vietnam and South Korea which ensures that Samsung has to pay no import duties.

The PLI scheme, first started by the Indian government for mobile phones, aims to encourage manufacturing in the country by providing direct incentives for production. Samsung has already taken part in the PLI for manufacturing mobile handsets.