What's new in the telecom networking realm is that Samsung Electronics India is considering a deadline extension request under the production-linked incentive (PLI) scheme from the government for telecom networking equipment to apply for the scheme, after initially deciding not to apply.

Prior to the Cabinet upheaval, the Centre had voiced its displeasure with the Korean giant's higher ups for not applying the PLI scheme for telecom equipment, through senior bureaucrats in the ministry of electronics and IT and the telecoms department.

Since setting up a network equipment facility in India with only one client, that is, Reliance Jio Infocomm, was not feasible currently, Samsung had previously informed the government that it would decline from participation.

Therefore, Samsung has been importing the equipment duty-free from South Korea and Vietnam over the free trade agreement (FTA) method.

However, the deadline to submit PLI applications was July 3rd. At the time of publication, an email submitted to Samsung India seeking comment had not received a response.

Currently, voices in the telecom realm are that, “Samsung is under pressure for refusing to join the PLI scheme for telecom network equipment. The government wants Samsung to invest in India so that it can become one of its global manufacturing hubs. Since the deadline has passed, the company is re-evaluating and may approach the government to see whether its application may be accepted”.

However, the rumours have it that, a few years ago, the government exerted similar pressure on Samsung, to reopen its television production facility in India, which it had closed. Since then, the company has reopened the plant and used contract manufacturers in India to expand TV production manufacturing.

Currently, rumours say that the government is seeking high-profile investors to drop cash into the PLI plans and as a matter of fact, government officials have expressed their dismay that Samsung did not apply for the PLI scheme for IT hardware. Hence, it fears that Samsung will not do so in future ones such as those for air conditioners and wearables.

A couple of months ago it was said that Samsung Electronics is the only company among 16 to have met both investment and output requirements this year under PLI's plan for handsets and components.

Then, it so happened that, other phone manufacturers, such as Apple contract manufacturers Foxconn and Wistron, Optiemus, Dixon, Lava, Bhagwati, UTL, Sahasra, AT&S, and Neolync, may miss out on Rs 5,334 crore in incentives set aside for the fiscal year ending March 31. A government official, however, stated that a final decision on the topic has yet to be made.

The PLI scheme for phone and component manufacturers was designed to attract Chinese businesses and encourage local production for both home and export markets. It was launched in August 2020 for 16 companies, but approvals didn't come until October. The incentives are paid in proportion to the achievement of investment and output goals, rather than on a pro-rata basis.