South Korean electronics giant Samsung is likely to apply for the Modi government’s INR 12,195-crore PLI scheme, to manufacture 4G and 5G gears and other telecom equipment in India, to further use it domestically and for export to other countries. It expects to provide telecom gear to its sole telco buyer in India up to now – Reliance Jio – apart from world shoppers, from its manufacturing facility which is anticipated to come up Uttar Pradesh.
This would imply that Samsung could be part of different world producers like Cisco Jabil, Flex, and Foxconn, apart from European telecom tools distributors Nokia and Ericsson in making use of for the scheme of the Indian authorities aimed toward boosting native production of telecom tools and decreasing imports. Any big company getting approved under the scheme will have to invest a minimum of Rs 100 crore to set up the production lines and machinery to avail benefits. For the inclusion of MSMEs in the scheme, the minimum investment threshold has been kept at Rs 10 crore.
After the pandemic, many companies are looking to diversify their investment, so does Samsung. Samsung has recently won 5G business globally. Jio, however, is its most critical and largest client globally,” the official told ET. The Korean company’s exclusive tie-up with Reliance Jio on 4G has already ended as Reliance Jio has stressed its intention of building everything related to 5G in India.
“Samsung wants to support Jio’s network from a local manufacturing unit since there is a push for make in India,” a senior Jio executive told the business daily.
Bank of America Merrill Lynch, in a recent report, said that Jio may depend on its 4G gear partner Samsung so that its 5G equipment is backward compatible. “If Samsung starts assembling/manufacturing 5G massive MIMO/RU in India, then Jio’s entire 5G stack in theory would be ‘Made in India’,” said the report.
Equipment makers, including Samsung, are awaiting the final guidelines of the PLI scheme, which will specify how many global and local companies would be selected. The scheme for telecom equipment will offer incentives to the selected companies for incremental production over the base year. It would be operational from April 1 and the government expects it to lead to incremental production of around Rs 2.4 lakh crore, with exports of around Rs 1.95 lakh crore over five years.
The scheme will cover core and transmission equipment, 4G/5G next-generation radio access network and wireless equipment, access and customer premises equipment (CPE), Internet of things (IoT) access devices, other wireless equipment, and enterprise equipment like switches, routers, etc.
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