Samsung Plans Computer Parts Imports

Samsung Electronics India Information and Telecommunications Ltd (SEIIT), the wholly owned subsidiary of Korean electronics major Samsung, plans to undertake bulk import of computer components for sale to local computer equipment manufacturers on a wholesale basis.

Subject to government approval, Indian hardware manufacturing firms and suppliers which import computer monitors in their own capacity can buy in bulk from SEIIT directly, bringing down their cost inputs substantially, according to the company.

SEIIT is taking advantage of a new sector specific guideline laid under point 8(i) of the foreign direct investment (FDI) policy which permits FDI in wholesale bulk trading. FDI in trading is, otherwise, not permitted. Commerce and industry ministry officials said, MNCs now prefer this route to bring in imported products for sale in the country. In recent times, companies manufacturing products ranging from cars to watches have proposed to import their products through the wholesale trade route.

 

A few liquor companies are also said to have sought government permission to bring in their products through a similar arrangement, though for a limited sale.

Samsung, however, will continue to manufacture computer monitors at its facility in Noida, near Delhi. It is also test-marketing keyphone systems, ADSL, cable modems, desktop computers, printers and printer consumables and fascimile machines. Test marketing is permitted for a period of two years ending October 30, 2002.

Samsung Electronics has already made an investment of $100 million in the subsidiary, out of an originally proposed investment of $200.2 million.

In its application to the government, the company said, at present Indian hardware manufacturers and suppliers import computer monitors from different Samsung entities. In the proposed scheme of things, Samsung will facilitate this purpose by coordinating with different Samsung entities to undertake this import function in bulk.

It said the different components so sourced by the company will be supplied to the computer equipment manufacturers on an export/ex-bonded warehouse basis. This will help to establish a business and economic network in which financial and technical inflows are facilitated on a consistent basis and subsequently nurtured through marketing, procurement and logistics support.

Samsung has permission from the government to market high-technology, value-added products, such as hard disc drives, optical disc drives, notebook PCs, colour monitors, MP3 players and other handheld PC products. It also has permission to market cellular phones, telecom equipment, etc.

The company has also been granted government approval to manufacture computer monitors in the country. Such operations have already begun at its facility in Noida.

According to sources, the proposal was taken up for consideration of the FIPB last week. But the commerce ministry sought deferment for a week to seek further clarifications. The case came up for consideration at the FIPB meeting here today. The decision of the FIPB on the issue, however, could not be ascertained. The commerce ministry is learnt to have cleared the scheme.