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Samsung said it was in a dispute with the government over Rs. Rs. worth of PLI incentives. 900 crores: all details

Samsung Electronics has struggled to collect the manufacturing incentives it believes India owes it, highlighting the sometimes difficult nature of such government programs.

The Indian division of the smartphone giant is looking for just under Rs. Rs 900 crore in incentives for the fiscal year through March 2021, according to people familiar with the matter. But the government is only willing to give the South Korean firm Rs. 165 crores if he cannot provide more information and documents to support his claim, the people said, asking not to be identified as the matter is not public.

Incentives are a key ingredient in Prime Minister Narendra Modi’s push to turn India into an electronics manufacturing hub. In 2020, the country announced $6.7 billion (roughly Rs. 54,470 crores) in manufacturing-related incentives (PLI), promising companies cash from sales of locally manufactured smartphones. The plan prompted Samsung to produce billions of dollars of devices in the country, making it the largest smartphone exporter from the South Asian country in its latest fiscal year.

Samsung is in talks with the government about incentive payments, a company spokesperson said via email, adding that the phone maker is working with various stakeholders to make the PLI program a success.

The Indian Ministry of Technology did not respond to a request for comment.

The dispute concerns Samsung’s first year of participation in the incentive program. In contrast, the Indian division of Apple supplier Foxconn has already won Rs. 360 crores allowance for the next fiscal year ending March 2022. Claims from Wistron, another key Apple contract manufacturer, are being processed.

Unlike contract manufacturers such as Foxconn and Wistron, Samsung manufactures and sells its devices to retailers and consumers. This may have resulted in disparate accounting estimates for the cost of each device, people said. The government awards cash incentives based on the cost of manufacturing the device.

India is Samsung’s largest smartphone market outside of South Korea by volume and is critical to its growth. The company, which operates what it says is the world’s largest phone factory on the outskirts of New Delhi, exported about $3 billion (roughly Rs. 24,390 crore) worth of devices from India from the year to March 2022.

© 2023 Bloomberg LP


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