The move is seen as a win for Prime Minister Narendra Modi’s flagship programme to lure investors to manufacture in the South Asian nation.
The factory is located at the outskirts of Delhi. This will double Samsung’s Noida unit capacity for mobile phones to 120 million units a year from 68 million units a year. The phase-wise expansion will be completed by 2020.
Smartphone makers are building factories in the world’s fastest growing market for the product bolstering Modi’s push to encourage overseas investors to “Make in India.” Asia’s third-largest economy attracted record foreign direct investment in the past year totalling$62 billion, including reinvestment.
India’s smartphone market grew 14 percent with total shipments of 124 million units in 2017, the fastest pace of growth among the top 20 markets, according to International Data Corp. Demand for new phones is surging in India, helped in part by billionaire Mukesh Ambani offering $23 4G feature-phones, free voice services and cheap data plans. China’s Xiaomi said in April it will set up three more factories in India.
“We are aligned with Government policies and will continue to seek their support to achieve our dream of making India a global export hub for mobile phones”, H.C. Hong, Chief Executive Officer, Samsung India, said in a statement.
The Samsung factory will make everything from low end smartphones that cost under $100 to its flagship S9 model, according to the company. Earlier this year, China’s Xiaomi displaced Samsung from the No. 1 smartphone spot in the country, breaking its long-held dominance.
Indians favour low-end smartphones priced at $250 or less, given the low average annual income of its people, according to Bloomberg Intelligence. Apple has been unable to enter the market because people actually chose to spend their money on sensible things like food, according to a report earlier this month.
Last year, India overtook the US to become the world’s second largest smartphone market after China. There will be 780 million connected smartphones in 2021, compared with 359 million in 2016, according to a study by Cisco.
