September 24, 2020

The next Samsung phone you buy could be made in India

It could also help Samsung compete with Apple in terms of value for money.

Samsung Galaxy A51 screen in hand

  • Samsung is reportedly moving a large portion of its smartphone manufacturing to India.
  • It would make devices worth $40 billion in five years.
  • This could lower Samsung’s costs and help it compete with Apple, which is also setting up shop in India.

Samsung might move a significant chunk of its smartphone production to India, and that could affect your phone costs in addition to helping the company’s bottom line.

Economic Times sources (via SamMobile) claim Samsung is planning to move some of its production in Vietnam and other countries to India under the country’s Production Linked Incentive system, which rewards domestic manufacturing. It reportedly hopes to produce over $40 billion in devices (about Rs 3 trillion) in India over the next five years. Most of that value — about $25 billion — would come from phones priced over $200.

About half of Samsung’s production is based in Vietnam, according to estimates.

Read more: The best smartphones in India under 40,000 rupees

The company didn’t respond to an ET request for comment.

Like Apple, which recently started making more iPhones in India, Samsung would have a clear economic incentive to shift its manufacturing. It would avoid a 20% import duty and could keep prices down for some of its phones in at least India. That could help Samsung fare better in a fiercely competitive Indian market.

It might also help Samsung’s manufacturing make more economic sense as a whole. Samsung is believed to have 20% of the smartphone market in terms of sheer volume versus Apple’s 14%, but just 22% of the value compared to Apple’s 38% share. Reduced phone production costs wouldn’t necessarily boost Samsung’s value, but they could help it earn more with each phone.