Korean Eletronics gaint Samsung is looking to stop TV production in India as the company works out plans to import the units from Vietnam. The move comes months after the government introduced import duty on a key component and some other parts that go into making TV panels.
Samsung makes televisions at its factory in Chennai, and annual production is estimated at around three lakh units. “The company has sounded out some of its local suppliers about plans to curtail, and gradually withdraw production from Chennai,
Ironically, the company’s intention to move out TV production comes months after it had announced a massive expansion in mobile phone manufacturing in the country under the Make In India programme. The announcement was made in the presence of Prime Minister Narendra Modi and Korean President Moon Jae-in and saw the company announce handset capacity addition from 68 million annually to 120 million.
Samsung India did not respond to a detailed questionnaire regarding its TV manufacturing plans. On the question of moving out production, a spokesperson said, “Samsung remains deeply committed to India. As regards to your query, no decision has been taken so far.”
Sources said the government’s decision to impose an import duty on “open cell”, one of the most critical parts in TV panels, during the Union Budget had prompted the company to look into alternate manufacturing sites.
The Budget had imposed a 10% duty on open cell, which was subsequently brought down by half after protests from TV manufacturers. However, the reduction was still seen as insufficient.
Vietnam is one of the most important manufacturing destinations for Samsung, and it uses the country as a top manufacturing base for electronics such as mobile phones. Estimates peg the value of goods manufactured by Samsung in Vietnam at over $50 billion, much higher than the near $8 billion revenues that it achieved in India in 2016-17.
A source also said that Samsung’s plans may also be linked with India’s trade negotiations for the Regional Comprehensive Economic Partnership (RCEP) agreement with China and Vietnam. The RCEP bloc comprises 10 ASEAN members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners — India, China, Japan, South Korea, Australia and New Zealand.