Samsung Electronics will apply for the 12,295-crore production-linked incentive (PLI) scheme to produce 4G and 5G gear along with other equipment in India for domestic and overseas sales purposes.
The company expects to supply its telecom gear to Reliance Jio and also anticipates attracting other international clients through its new factory that will be established in Uttar Pradesh. Hence, the South Korean multinational giant is set to join the likes of Foxconn, Flex, Jabil, Cisco, Nokia, and Ericcson in applying for the PLI scheme in order to enhance local production of telecom equipment.
An investment of at least Rs 100 crore to establish production lines along with machinery is necessary for any big company approved under the PLI scheme to make use of the rolled-out benefits. However, the initiative has also opened its arms for MSMEs by lowering the minimum investment threshold to Rs 10 crore.
“Samsung is looking to have diversified manufacturing given that it has recently won 5G business globally. Jio, however, is its most critical and largest client globally,” an official was quoted in an Economic Times report.
Reliance Jio was Samsung’s only telco customer in India so far but the collaboration between the two companies has concluded now. Jio is now intending to build its own 5G equipment domestically and a senior executive from the Mukesh Ambani-owned company said that Samsung is looking to back Jio’s network through a local production unit.
Jio is also slated to give orders to manufacturers that have “tier 1” facilities situated in India for its aforementioned 5G equipment. “Jio will not procure anything from outside. Everything will be made in India,” the official mentioned.
Merill Lynch recently reiterated in a report that Jio may partner with its 4G gear partner Samsung for its 5G equipment too for backward compatibility, i.e. to use older hardware, software pieces without making any special modifications or adaptations.
“If Samsung starts assembling/manufacturing 5G massive MIMO/RU in India, then Jio’s entire 5G stack, in theory, would be ‘Made in India’,” the report revealed.
Equipment makers, including Samsung, are now looking forward to the eventual guidelines of the PLI scheme that will specify the number of global and local companies that will make the final cut.
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