The South Korean company Samsung has stated that it will not participate in the production linked incentive (PIL) scheme in India for the telecom sector. As per an ET Telecom report, the decision was announced by Samsung India officials to the Department of Telecommunications (DoT) in a video conferencing meeting on Wednesday. Two of the senior industry executives stated that Samsung does not want to commit new investment in a market where it has just one client. However, the top management of Samsung has told the government that it might tap such opportunities in future. Currently, Samsung is extensively supplying equipment to Reliance Jio’s 4G telecom market along with 5G trials supplies.
Samsung Does Not Find Business Need to Invest in New Facility
Since Samsung is exclusively supplying to Jio, nearly the entire supply is sourced from plants in Vietnam, South Korea and China, which are capable of catering to Jio’s requirement. Also, the imports from Korea and Vietnam are at zero duties through the free trade agreement route. One of the executives who are aware of the matter stated that Samsung did not find it suitable in business interest to invest in another new facility in India. The installation of a greenfield plan would require an investment of about Rs 800 to 1,000 crore.
PLI Scheme to Make India Global Manufacturing Hub
The PLI scheme for telecom equipment was given a green signal back in February for making India a global hub for such manufacturing. The government approved a budget blueprint of nearly Rs 12,195 crore over a period of five years. Not only this, but the government also expects a fresh investment of Rs 3,000 crore through the PLI scheme. 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.
Out of the box, Nokia India has already committed that it will participate in the scheme. Also, various reports and news flourishing on the internet suggest that Ericsson and other companies are eager to participate in the PLI scheme. The flagship PLI schemes are aimed at encouraging manufacturing investment, create job opportunities and boost exports of make in India products.
