Changing Tides: Samsung Electronics plans to start making laptops in India from next month

Samsung Electronics is gearing up to commence laptop production in India in the coming month, according to sources familiar with the matter. This move aligns with the Indian government’s fervent efforts to promote domestic manufacturing by offering financial incentives, tax benefits, and import regulations.

The company’s expansive Greater Noida factory, primarily dedicated to mobile phone production, has recently undergone expansion to accommodate a new laptop manufacturing unit with an anticipated annual capacity ranging from 60,000 to 70,000 units, as per a report by the Mint.

Although this number is tiny compared to what Dell, Lenovo and HP are making in India, it is a monumental stepping stone for Samsung, which, historically, has been a minor player in the laptop space in India.

One of our sources revealed, “Samsung is all set to initiate laptop production here. The Noida facility, already the largest mobile phone manufacturing factory for the company, will incorporate the additional lines dedicated to laptop production.” This source preferred to remain anonymous.

A second anonymous source corroborated that the new manufacturing unit is slated to commence operations in the upcoming month, albeit initially at a limited capacity. “We expect to produce around 60,000 to 70,000 units, which represents the annual production capacity,” the source added.

This strategic move positions Samsung as one of the first foreign hardware manufacturers lacking local laptop production capabilities to kickstart manufacturing. This comes in response to the Indian government’s proposed measures aimed at reducing laptop, tablet, personal computer (PC), server, and ultra-small form factor device imports, with these restrictions set to take effect from November 2024. The overarching goal is to curtail India’s reliance on imports, especially from China.

The establishment of this laptop manufacturing capacity is expected to necessitate an investment of approximately ₹100-200 crore. Unfortunately, queries directed to a Samsung India spokesperson remained unanswered as of Monday evening.

The Ministry of Electronics and Information Technology, in conjunction with the Directorate General of Foreign Trade under the Ministry of Commerce, is in the process of establishing an import management system.

This system will require companies that import IT hardware, including laptops and servers, to register from 1 November and reduce their imports through annual quotas. The government plans to allow a specific quantity of products to be imported each year, with a gradual reduction over subsequent years. These restrictions are subject to review after a six-year period.

Alongside these import restrictions, the government is offering incentives amounting to ₹17,000 crore through a production-linked incentives (PLI) scheme for IT hardware over a span of five to seven years.

It’s worth noting that Samsung India did not partake in the IT hardware PLI scheme, which concluded at the end of August, according to data released by the IT ministry.

Samsung already manufactures a range of its consumer products in India, with its largest mobile phone manufacturing facility also based in the country, an endeavour which was started in 2017 with an investment of nearly ₹5,000 crore.

Currently, a significant portion, approximately 83-85 per cent, of laptops, valued at around $8 billion, sold in India are imported. However, the local PC market, encompassing laptops, has witnessed a decline for the past four consecutive quarters since April 2022.