Samsung meets target, applies for Rs 900 crore sops under PLI scheme

Having met the target of Rs 15,000 crore worth of production of phones priced over Rs 15,000, Samsung has applied for the highest possible sops under the PLI scheme worth nearly Rs 900 crore. The smartphone giant also exported phones about Rs 13,850 crore.

The PLI scheme offers graded incentives, or cashbacks, worth 6% of incremental sales of goods achieved over base year for the first two years each, 5% for the third and fourth year, and 4% for the fifth year. The 6% cash back translates to Rs 900 crore for Samsung. To quality for these, Samsung and other global companies must produce incremental goods worth Rs 4,000 crore, Rs 8,000 crore, Rs 15,000 crore, Rs 25,000 crore and Rs 50,000 crore in five successive years.

According to data provided by business intelligence firm Tofler, Samsung India Electronics Ltd’s FY20 standalone net profit was Rs 2,902.30 crore on revenue of Rs 78,651.20 crore. The company get around 70% of its India revenue, or around Rs 55,000 crore, from the mobile phone segment; its India revenue from mobile phones for FY21 is also in the same range.

The annual ceiling on incentives payable, as per the guidelines, to each applicant is to be determined based on financial outlay and number of eligible applicants in each of the target segments. The total outlay for the first year for all the 16 applicants was fixed at Rs 5,334 crore.

It should be noted that the government approved Foxconn units Hon Hai and Rising Star, and iPhone makers Wistron and Pegatron to receive incentives for the segment for global companies. The rest of the approved applicants include domestic companies such as Lava, Micromax, UTL Neolyncs, Padget Electronics and Optiemus Electronics.

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The initial year of production under the PLI scheme was 2021 and to end in 2024-25, but the industry urged the government for a year’s extension because the COVID-19 pandemic had brought production to an abrupt halt. As such, the government allowed flexibility in choosing any five years out of the six from FY21 to FY26 for claiming incentives.