India: Disagreement Between Samsung and India Over the $110 million in Industrial Incentives
Samsung Electronics Co. reportedly is having problems getting the financial incentives India owes it, highlighting the frequently difficult nature of such government programmes.
For the current fiscal year, which ends in March 2021, the India unit of the international smartphone business is reportedly seeking incentives totalling slightly over Rs 900 crore ($110 million).
The South Korean corporation would only earn 1.65 billion rupees from the government, according to the individuals who asked to remain unnamed because the topic is private. If required, more information and support may be requested. The incentives are what Prime Minister Narendra Modi needs to turn India into a hub for electronics production.
The country provided $6.7 billion in manufacturing incentives (PLIs) in 2020 to make sure that companies would make money from the sale of cell phones made in the nation. Due to pressure to develop high-end items worth billions of dollars, Samsung was the country's top smartphone exporter in the most recent fiscal year.
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According to email exchanges from a corporate spokesperson, Samsung is in discussions with the government regarding the incentive payout and it is working with other partners to make sure the PLI programme is effective.
The Indian Ministry of Technology declined requests for comment. Samsung's early involvement in the incentive programme is the problem.
An incentive for the upcoming fiscal year, which concluded in March 2022, has already been given to Foxconn Technology Group India, a supplier to Apple Inc. Claims from Wistron Corp., another important Apple contract manufacturer, are already being processed.
India is Samsung's largest smartphone market outside of South Korea and is crucial to the company's growth. The company boasted of having the largest phone manufacturing facility outside of New Delhi in the entire world and that India exported electronics worth roughly $3 billion in the year before March 2022.