Samsung to receive incentives worth Rs 500 crore under PLI scheme

Samsung Electronics will receive incentives worth Rs 500 crore under the production linked incentive (PLI) scheme for extra production of mobile phones in 2020-21, a senior government official said.

The company had claimed a PLI incentive of Rs 900 crore.

The claim was filed by the South Korean electronics manufacturer under the Production Linked Incentive scheme for large-scale electronics manufacturing announced in 2020.

"The matter has been settled. The company will be getting around Rs 500 crore," the government official, who did not wish to be named, said.

On Rs 900 crore, the government had flagged questions and had asked the company to review their claim.

When contacted, a Samsung India spokesperson said: We are currently in an advanced stage of discussions with the Government of India on the incentive payout.

"Samsung is a committed partner of India for over 26 years. As the leading smartphone player, we have been working closely with various stakeholders to make the PLI scheme a success.

To qualify for incentives under the scheme, a foreign company has to manufacture phones of value above Rs 15,000 a piece and achieve incremental sales of Rs 4,000 crore in the first year.

The scheme was notified on April 1, 2020, under which there is an incentive of 4 to 6 per cent on incremental sales for a period of five years subsequent to the base year.

The companies would also have to invest at least Rs 250 crore a year for four years.

In the first two years, the manufacturer will get 6 per cent of the sales as incentive which will come down to 5 per cent in the third and fourth year. In the last year of the scheme, the incentive will be 4 per cent.

For domestic manufacturers, the investment and incremental sales are lower. The total outlay of the scheme is Rs 40,951 crore.

Five global and five local companies were selected for the PLI scheme which started in August 2020.

The scheme has helped the sector to boost domestic manufacturing and exports of smartphones. These exports jumped to USD 7.5 billion during January-June this year from USD 2.5 billion in January-June 2022.