on Friday inked a deal with home grown contract manufacturer, Dixon Technologies to restart local production of LED television sets.
The Korean electronics giant resumed India production of television after almost 15 months, when it stopped manufacturing at its own plant near Chennai in October 2018 due to imposition of 5% import duties on LED TV panel by the government and instead starting importing from its plant in Vietnam at zero duties through the Free Trade Agreement (FTA) route.
ET had reported last year November about Samsung and Dixon entering into an agreement for local production of television sets in the country. This was after the government scrapped 5% import duty on open cell TV panels last September.
The TV panel accounts for almost 65-70% of the production cost of LED televisions. There are currently no domestic manufacturers of television panels even though the government has been trying to push local production of this component.
In a stock market notice, Dixon said it will be manufacturing LED TV for Samsung from its manufacturing facility located at Tirupati, Andhra Pradesh.
Sunil Vachani, executive chairman, Dixon Technologies, said he expects the partnership with Samsung will further grow since Dixon already manufactures washing machine, mobile phones and now LED TVs.
Incidentally, there was intense pressure on Samsung from the government to restart TV production since its exit was a blot on the flagship Make in India programme.
Industry executives said with import duty scrapped on TV panels, local production will help Samsung since it can better manage its supply chain and save on logistic costs now that there is no cost difference between local manufacturing and FTA imports.
The television industry in India is going through one of its worst years with sales remaining mostly flat through 2019 despite the cricket World Cup and
. Consumers are increasingly buying Chinese and online value brands such as
and Thomson in screen sizes up to 43 inches, which forced Samsung,
and LG to drop prices by 20-40%. Local production will provide greater cushion for Samsung in case it wants to cut prices further, industry executives said.