Big Setback for Make In India: Samsung Can Shut Down TV Production Unit In India!

Now, this is one bad news for #MakeInIndia campaign.

As per reports coming in, Samsung can stop TV production in India, and choose Vietnam over India.

Why will Samsung do this? What exactly will be Vietnam chosen for?

Read on to know more!

Samsung’s TV Production In India Can Be Stopped!

Right now, Samsung has a TV production factory in Chennai, whose capacity is approximately 3 lakh units a year.

However, now, Samsung can stop this production facility, and choose Vietnam to import units.

Once the units are imported from Vietnam, they can be assembled in India, and hence, no need for a full-fledged production unit in India.

Hundreds of jobs can be slashed, and this can be a big setback for Make in India vision.

As per an unnamed source, Samsung has given hints of a shut-down to local vendors, and soon, the entire facility will be closed down.

This news comes barely two months after Samsung launched their biggest ever mobile manufacturing unit in Noida, UP. Spread over 35 acres, this single unit will generate 35,000 jobs as 120 million units of smartphones will be produced from this facility.

Ironically, this same facility started manufacturing TV units in 1997, which was later converted into smartphone factory, and TV manufacturing was transferred to Chennai.

As per some reports, Samsung was supposed to start manufacturing refrigerators and flat-panel televisions as well, besides smartphones at the new Noida facility, which has received an investment of Rs 4300 crore.

Reacting on this news, a spokesperson for Samsung said, “Samsung remains deeply committed to India. As regards to your query, no decision has been taken so far.”

Why Samsung Will Close Down Their Factory in Chennai?

The reason is high import duty on some key manufacturing components of TV, which the Govt. announced in the month of April.

Among others, the import duty was hiked for ‘Open Cell’, which is considered an important component for TV panels manufacturing.

Now, if Samsung imports these expensive components, and then manufacture their TVs in India, then their profitability reduces and thereby making the whole program meaningless.

Interestingly, the import duty was hiked by Govt. to encourage local production of electronics gadgets, but it seems it backfired in the case of Samsung. It was earlier 10% import duty for Open Cell, which has been reduced to 5%, but still, seems high for companies like Samsung.

But Why Vietnam?

Because Vietnam is one of the strongest manufacturing hubs of Samsung, even matching the mighty China.

In 2016-17, goods manufactured at Vietnam by Samsung was worth $50 billion of exports, compared to $8 billion of goods manufactured in India, which were exported.

We will keep you updated, as receive more inputs.

Also Read:

OnePlus Defeats Apple, Samsung In Premium Smartphone Sales – How Did This Happen?