Government’s decision of bringing the deadline for the Phased Manufacturing Programme (PMP) ahead by one year may have some consequences such as Samsung reportedly planning to reduce the volume of some of its flagship models like the Samsung Galaxy S9 and Note 9 being manufactured in India.
If you don’t know, PMP is a scheme under which foreign manufacturers are allowed a window to import their components and assemble their products here. One thing is that the time allowed must be used to simultaneously develop local vendors or set up the components making units in India itself. This was scheduled to run till 2020, as per the original announcement, but suddenly the government has changed its policy and wants the compliance to be over by this February.
Companies failing to cope up to this revised deadline will end up paying higher duties on imported components.
Samsung decided to make its devices including the high-end phones here. The company has a huge plant as well. Some important components like the display panels were to be made here too but the time taken to setup a manufacturing unit for such high-technology products is longer. Samsung had planned to do it by 2020. It would have stuck to the PMP schedule as well. But this change Government’s policy means the company will have to pay an additional 10-11% on these important components.
Also, Samsung would have planned to export a large part of these Samsung Galaxy S9 and Note 9 phones from the Indian plants to some of the other markets. This will also change and Samsung has stopped assembling its TVs in India following a similar duty imposition of 5% on some key components.
