Samsung's shift from China to Noida a boost for Make in India

Samsung's shift from China to Noida a boost for Make in India

The South Korean smartphone giant's decision to move their operations to India is a statement of intent of the growth potential that exists in the world's second largest smartphone market.

In a massive boost for manufacturing in India, smartphone giants Samsung have now have inked a deal which ensure the shifting of their mobile and IT display production unit from China's to Noida in the state of Uttar Pradesh in India. Samsung's total commitment towards this venture is $654.36 million. The Korean giant's decision is a shot in the arm for Indian prime minister Narendra Modi's drive to make India a manufacturing hub and boost the mantra of Make in India, Make for the World. https://twitter.com/BJP4India/status/1338146884704108544 Samsung is no stranger to the state of Uttar Pradesh given that they operate one of the world's biggest mobile plants there. The South Korean phone giants had requested the UP government for tax incentives and, in keeping with the government's pledge to make investments easier for foreign companies in India, they received dispensation of 7 billion rupees in financial benefits and in addition will get an exemption from a tax payable on the transfer of land for the factory.

Significant benefits for investors

The benefits offered to Samsung come under the Centre's Scheme for Promotion of Manufacturing Electronic Components and Semiconductors (SPECS). The project provides Uttar Pradesh with a global identity of an export hub and will lift the profile of the state in receiving more foreign direct investment (FDI).

The Indian government's PLI scheme is expected to make India a hub for high value phones and leave the lower end phone making open to India's domestic phone manufacturers.
The Indian government's PLI scheme is expected to make India a hub for high value phones and leave the lower end phone making open to India's domestic phone manufacturers.

Samsung's decision to move their operations to India is a statement of intent of the growth potential that exists in India which is the world's second largest smartphone market.

Finance minister Nirmala Sitharaman's decision to table a federal proposal that provides incentives under a $6.65 billion plan encouraging manufacturing of smartphones by 16 companies has seen international corporations like Foxconn, Wistron and Pegatron flocking to India. India is the third country in the world to have such a significant Samsung presence.

India Global Business had reflected on Samsung's plans to establish a presence in India in September. Samsung had set a target of selling 20 million budget and mid-range Galaxy M series phones in India by December. This initiative also marks Samsung's renewed effort to sell its phones online in India through Samsung.com.

These moves come close on the heels of Apple and Samsung, two global market leaders in the mobile phone industry committing to set up more factories in the country to make and export high end smartphones costing more than $200 each from India. Their target: Exports worth about $50 billion each over the next five years.

Samsung always keen on India

Customers queue up to purchase Apple's latest iPhone model. The smartphone giant had committed to setting up a presence in India, the world's second largest smartphone market.
Customers queue up to purchase Apple's latest iPhone model. The smartphone giant had committed to setting up a presence in India, the world's second largest smartphone market.

In 2018, Samsung had opened their biggest mobile store in the world in India in an effort to attain the top in the world's second-biggest smartphone market amid fierce competition from Chinese brands. Operations were set up in a 33,000 sq ft store in the southern tech hub of Bengaluru to help them overtake global rival Apple Inc. This was followed by the opening of the world's biggest smartphone plant outside Indian capital New Delhi. Speaking to the media then Mohandeep Singh, Senior VP, mobile business at Samsung India, had said, “India is an extremely important market. The company plans to open more such stores in some of India's top 10 cities. These stores ... will really help us further consolidate our share as we move forward.”

Finance minister Nirmala Sitharaman's decision to table a federal proposal that provides incentives under a $6.65 billion plan encouraging manufacturing of smartphones by 16 companies has seen international corporations like Foxconn, Wistron and Pegatron flocking to India.
Finance minister Nirmala Sitharaman's decision to table a federal proposal that provides incentives under a $6.65 billion plan encouraging manufacturing of smartphones by 16 companies has seen international corporations like Foxconn, Wistron and Pegatron flocking to India.

The decision taken by global smartphones manufacturers to invest in India will ensure that the domestic value addition in mobile phones is set to jump from from 15-20 per cent to 35-40 per cent boosting the country's status as a manufacturing hub. This, in turn, will help to generate in excess of 300,000 jobs and triple the amount in indirect employment across the country given that these projects are now spread across six Indian states namely Uttar Pradesh, Maharashtra and the four southern states of Andhra Pradesh, Telangana, Tamil Nadu and Karnataka, Chennai in Tamil Nadu and Bangalore in Karnataka have Foxconn and Wistron factories, respectively.

Make in India gains clarity

The Make in India template visioned by Modi is gaining clarity amongst international companies. The intent was laid bare during the pandemic but the ambition and scale of it is now evident. India has showcased its potential as a global manufacturing hub and the gauntlet has been thrown down to its competitors, through policy procedures, cutting down of red tape and positive interactions with business chambers and large multinationals, that the country means business.

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India Global Business
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