Samsung eyes India shift—to avoid US tariffs on Vietnam exports
What's the story
Samsung is considering moving its smartphone and electronics manufacturing from Vietnam to India, according to Moneycontrol.
The move would help the company avoid the risks of potential US tariffs on Vietnamese goods.
The South Korean firm has already held talks with contract manufacturers, including Bhagwati (Micromax) and Dixon, to shift some of the production operations to India.
Current scenario
Vietnam's role as Samsung's primary production hub
Vietnam is Samsung's primary production hub at the moment.
But rising trade tensions have prompted the electronics giant to look at India as a strategic alternative for catering to global markets, including the US.
As per Counterpoint Research, nearly 60% of the 220 million smartphones Samsung sells worldwide every year are produced in Vietnam.
The number highlights Vietnam's importance in Samsung's global supply chain.
Facility utilization
Existing facilities in India may be utilized
Samsung is looking at using its own plants in Chennai and Uttar Pradesh, as well as those of its Indian EMS partners.
This would be for manufacturing smartphones and other electronics like TVs and home appliances for export.
Samsung India currently makes the majority of its smartphones and other electronics at factories in Chennai and Uttar Pradesh.
Outsourcing strategy
Partnership with Indian contract manufacturers
Samsung has further diversified local production by outsourcing certain smartphone and consumer product models to Indian contract manufacturers like Dixon Technologies.
In 2024, Samsung produced nearly 60 million handsets via ODMs, mainly through Huaqin, Wingtech, and Longcheer.
Shanghai-based Huaqin recently entered India through a joint venture with Bhagwati Products (Micromax), which operates under Vivo's premises.
Incentive eligibility
Participation in India's PLI scheme
Samsung has been a part of India's production-linked incentive (PLI) scheme for the last five years and has been reaping its benefits regularly.
Now, the South Korean company is eligible for an incentive of over ₹1,000 crore as it has met its fifth-year target of ₹25,000 crore in incremental smartphone manufacturing under the scheme.
This highlights Samsung's commitment to expanding its manufacturing footprint in India.