Invest India, an investment promotion and facilitation agency, has recently announced plans to support South Korean giant, Samsung Electronics by means of tax and other incentives as the tech company seeks to invest US$705.75 million in a smartphone display plant in Uttar Pradesh (UP).
One of the leading smartphone sellers in India, Samsung had signed a MoU with Uttar Pradesh in the year 2019 on the project. In a recent letter, Invest India said that Samsung’s new display plant in UP, which is likely to begin operations in 2021, will generate some 1,300 jobs.
The agency said that they are submitting its recommendations to incentivize setup of HiTech industries in UP and support Samsung Display to relocate its operations to India. It added that higher capital incentives would support Samsung through a period of 20-year, including reimbursement of funding on IT infrastructure.
Commenting on the move, UP’s minister for industrial development, Satish Mahana said that these incentives were under consideration and the decision is yet to be made.
Sources speculate that the Samsung’s investment in India would favor the country in competing with neighboring rivals like Vietnam as its attracts global smartphone firms under the government’s ‘Make in India’ movement.
Speaking on similar lines, Invest India CEO said that competing nations like Vietnam, Thailand and Indonesia are currently offering targeted incentive packages on capital expenditure and it is vital for India to also promote investments by means of appropriate non-fiscal and fiscal incentives.
Established in 2019, Invest India is a non-profit venture under the Government of India’s DPIIT. As for Samsung, it already operates one of the world’s largest smartphone manufacturing plants. By having a local display manufacturing unit in India, the tech company could lower import taxes that India plans to charge on importing displays and to boost its smartphone export capabilities.