Samsung Electronics is seeking about Rs 900 crore from the government as manufacturing incentives. However, the Centre is willing to give only about Rs 165 crore unless the smartphone giant provides more information and documents to support its claim, according to Bloomberg quoting people who asked not to be identified.
The incentives are a key component in Prime Minister Narendra Modi’s drive to make India an electronics manufacturing hub.
A Samsung spokesman said via email said that the company is in discussions with the government on the incentive payout, according to the Bloomberg report. It added that the phone maker is working with various stakeholders to make the PLI program successful.
The central government had in 2020 announced $6.7 billion in production-linked incentives (PLIs), promising cash to companies on sales of locally made smartphones. The production of mobile phones has risen from about 60 million in 2014-15 to approximately 310 million in 2021-22.
Mobile phone exports during the current year, up to November 2022, have crossed Rs 40,000 crore. This is more than double the exports made during the same period last year, according to government data.
The Production Linked Incentive (PLI) Scheme for large scale electronics manufacturing was notified on April 1, 2020, under which there will be an incentive of 4 percent to 6 percent on incremental sales for a period of five years subsequent to the base year. The government had selected 16 proposals under the scheme, including from Samsung, Foxconn Hon Hai, Rising Star, Wistron and Pegatron with an incentive outlay of Rs 36,440 crore.
India is Samsung’s biggest smartphone market outside of South Korea by volume and crucial to its growth. The company, which operates what it once said was the world’s largest phone factory on the outskirts of New Delhi, exported about $3 billion of the devices from India in the year through March 2022.
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