MUMBAI: Samsung Electronics has formally opened a new factory in India, which the South Korean tech group says is the world’s biggest mobile phone manufacturing plant, part of its plans to expand production in the world’s fastest-growing major mobile phone market.
The factory in Noida, on the outskirts of New Delhi, will allow Samsung to make phones at a lower cost due to its scale at a time when other phone making hubs such as China are getting more expensive, analysts tracking the sector said.
The factory, inaugurated jointly on Monday by Indian Prime Minister Narendra Modi and South Korean President Moon Jae-in, will also help Samsung to compete more effectively with rivals such as China’s Xiaomi, which became India’s biggest smartphone brand by shipments earlier this year.
India, the world’s second-biggest smartphone market and home to more than a billion wireless subscribers, is a big opportunity for Samsung where sluggish smartphone earnings growth has fuelled concerns that its mobile business is running out of ideas to underpin sales of its premium Galaxy devices.
Samsung, which has been assembling phones in India since 2007, also plans to export India-made handsets.
While Modi’s flagship ‘Make in India’ campaign is still a long way from delivering on ambitious job promises, the programme has had some success with the phased manufacturing of mobile devices and components. More than 120 local factories currently assemble mobile phones and accessories like chargers, batteries, power banks and earphones in India, according to tech research firm Counterpoint.
“It’s a move that’ll obviously play well for Samsung but it also gives a much-needed shot in the arm to India’s mobile manufacturing ecosystem as it will push rivals to consider expanding local production,” said Navkendar Singh, an associate research director at International Data Corporation.