Probably Samsung will halt the production of flagship phones in India which will reduce local smartphone manufacturing and exports of the smartphone. This is due to India’s Phased Manufacturing program. This program basically promotes the local manufacturing of mobile components/ parts in India and was expected to take effect in March 2020. Samsung Manufacturing in India will be affected due to this.
Now Indian Government has asked to speed this process and has ordered that the component production should be started by February 2019 or it will impose a 10% duty tax on all imported components. Among other imported products, display of mobile phones is the most expensive. With tax, 25%-30% of a phone’s cost will be increased. Overall manufacturing cost will also significantly increased if taxed.
India Faulty Import Tax Policy Angers Samsung
On the other hand, Samsung India has told the government that if the new import duty is applied, the company will stop the manufacturing of its flagship phones in India and will also reduce manufacturing of midrange and entry-level smartphones.
Previously, Samsung had also ceased TVs production in India because of the new 5% duty on open cell LED panels. Let’s see whether the Indian government remove the tax. Until now it seems both parties will not be able to reach an agreement soon.