Why LG and Samsung have sued Modi government
What's the story
South Korean tech giants LG and Samsung have filed a lawsuit against the Indian government. The suit seeks to challenge a policy requiring higher payments to electronic waste recyclers.
The move comes in line with other major corporations challenging India's environmental regulations for their impact on business operations.
The lawsuit will be heard tomorrow, marking a major escalation in the row between foreign companies and PM Narendra Modi's administration over waste management.
Stats
E-waste recycling: India's challenge
India is the third-largest producer of electronic waste in the world, after China and the US. According to government data, only 43% of India's e-waste was recycled last year. The informal sector, mainly scrap dealers, makes up a large part of this industry.
Pricing dispute
Controversy over pricing policy
Samsung and LG have opposed the government's move to fix a minimum price for recyclers.
The government maintains the policy is crucial to bring more formal players into the sector and boost investment in e-waste recycling.
In their court filings, both companies raised concerns over these regulations.
Samsung argued "the regulation of prices does not inherently serve the purposes of environmental protection," while LG questioned if taxing companies under the 'polluter pays principle' would achieve desired government objectives.
Regulatory changes
New rules and their implications
India's new regulations mandate a minimum payment of ₹22 per kilogram for recycling consumer electronics.
Electronics companies argue this will drastically hike their costs, while benefiting recyclers at their expense.
Both LG and Samsung have voiced concerns over the proposed rates being too high and said they should be lowered, letting market forces determine prices instead.