Samsung LED unit in Uttar Pradesh is another step towards Make in India push: officials

Samsung LED display manufacturing unit is the first high-technique project of the South Korean firm, which is being relocated to India from China

In further push to Make in India, the Uttar Pradesh government recently announced that it would provide special incentives to Samsung Display for setting up a manufacturing unit for mobile and IT display products in Noida.

"Samsung already has a plant in UP, but they were shifting their LED unit plant from China. So they contacted us on what kind of facilities can be offered to them. We proposed capital subsidy to them," a senior state government official told Moneycontrol.

A decision to give incentives was taken in a meeting of the state Cabinet headed by Chief Minister Yogi Adityanath on September 11. The unit is expected to invest Rs 4,825 crore in the state.

This is the first high-technique project of the South Korean firm, which is being set up in India after relocating from China. After this India will become the third nation in the world to have such a unit.

The state government is also in talks with other companies that are looking to move out of China to set up shop here. "A German-based shoe company also has shifted out of China and has started manufacturing in Agra. We are in touch with many such companies and we are at different stages of discussions with them," the official said.

India is the world's second-biggest smartphone market with significant growth potential, which has driven companies such as Samsung to expand locally.

The company will also receive a financial incentive to the tune of Rs 460 crore under the Centre's Scheme for Promotion of Manufacturing Electronic Components and Semiconductors (SPECS).

The Centre recently announced a Rs 45,000-crore fund to incentivize domestic smartphone manufacturing. Of this, Rs 41,000 crore would be disbursed to firms through production-linked incentives. The rest would be offered under a proposed capital subsidy or reimbursement scheme.

"Under the electronics policy, they are getting about Rs 150 crore worth subsidies. Plus, since the land belongs to the mobile unit, it is being transferred to the display unit. We are giving them exemption on stamp duty for the transfer of land to the new unit. Essentially these are the two main benefits," another government official told Moneycontrol.

"It's a specialised unit. So direct employment that this particular unit would generate would be about 1,500 jobs and indirectly about 10,000," the first official mentioned above said.

The state government will have to make financial provision of Rs 250 crore for this project for five years, the official said.

The project is expected to provide Uttar Pradesh with a global identity of an export hub and will help the state receive more foreign direct investment (FDI).