Samsung India will reportedly stop local production of its flagship Galaxy S9 and Galaxy Note 9 smartphones. The company is looking to reduce mobile phone manufacturing because of government’s new ‘Phased Manufacturing Program’ (PMP).
Samsung Electronics has informed the government that it will be manufacturing lesser phones in India. The reason is suggested to be government’s Phased Manufacturing Program (PMP), ET reports. The government now wants companies to start local manufacturing of components from February 2019, which was earlier decided as anytime in 2019-20. If not followed, manufactures will face 10 percent import duty on these parts, which with a surcharge would go up to 11 percent.
As per the report, Samsung India Electronics told the government in a letter that if import duties are levied on display panels, the cost of manufacturing will go up and “we will have to stop the manufacturing of Samsung flagship products (Note 9 and S9) in India.”
The companies are said to have planned their investments accordingly for 2019-20, but with this new rule in place they would be paying extra duty on smaller parts since India doesn’t make these parts locally. Roughly a display panel accounts for 25-30 percent cost of a mobile phone’s production. Samsung is said to be in a process of setting up a display assembly plant for mobile phones, which will be operational by April 1, 2020. The unit will be able to produce AMOLED display panels in India.
Watch Video: Samsung Galaxy Note 9 First Look
Samsung, last year, inaugurated the world’s largest mobile phone manufacturing unit in India. The newly started Noida facility has seen investment of Rs 4,915 crore. The company plans to raise mobile phone capacity at the plant from 68 million to 120 million units a year by 2020.