Samsung, a South Korean firm, has announced that it would not participate in India’s production linked incentive (PIL) plan for the telecom industry. According to an ET Telecom report, Samsung India executives informed the Department of Telecommunications (DoT) of their decision in a video conference meeting on Wednesday.
Samsung does not want to commit additional investment in a market where it just has one client, according to two senior industry officials. Samsung’s top management, on the other hand, has warned the government that it may take advantage of similar chances in the future. Samsung is now delivering a lot of equipment to Reliance Jio’s 4G telecom industry, as well as 5G testing supplies.
Samsung does not believe there is a business case for investing in a new facility
Because Samsung is Jio’s sole supplier, virtually all of the supply comes from factories in Vietnam, South Korea, and China that are capable of meeting Jio’s needs. Furthermore, under the free trade agreement route, goods from Korea and Vietnam are duty-free. According to one of the executives familiar with the situation, Samsung did not believe it was in its best interests to invest in another new plant in India. An investment of Rs 800 to 1,000 crore will be required to build a greenfield scheme.
The PLI Scheme aims to turn India into a global manufacturing hub
n February, the PLI program for telecom equipment was approved, with the goal of making India a worldwide center for such production. The government has adopted a five-year budget proposal worth roughly INR 12,195 crore. Not only that but the PLI program is expected to attract a fresh investment of INR 3,000 crore. Since Samsung has walked out of the room, the government of India is shifting the attention on large companies like Nokia and Ericsson to make a substantial investment under the scheme.
Nokia India has already said that it will join the program out of the gate. Furthermore, many rumors and news circulating on the internet indicate that Ericsson and other firms are keen to join the PLI program. The main PLI initiatives aim to encourage industrial investment, generate jobs, and increase exports of made-in-India goods.