“Report: Samsung Considers Moving Manufacturing from Vietnam to India Due to US Tariff Threats”

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In response to escalating trade tensions and proposed tariffs by the US government, South Korean tech giant Samsung is reportedly exploring shifting part of its smartphone and electronics manufacturing from Vietnam to India. The move comes amid concerns over a steep 46% tariff on imports from Vietnam, proposed by the Trump administration. In comparison, India faces a less burdensome 26% tariff and has been granted a temporary 90-day reprieve from reciprocal tariffs, excluding China.

Vietnam: A Primary Manufacturing Hub for Samsung

Vietnam has long served as Samsung’s main manufacturing base, producing approximately 60% of the 220 million smartphones Samsung sells annually. In fiscal year 2024, the country exported over $52 billion worth of mobile phones and components for Samsung, making it a significant player in the company’s global supply chain. However, with the US government’s tariffs on products from Vietnam, Samsung is now looking at alternative locations to reduce the impact of these new levies.

Exploring Manufacturing in India

India, with its more favorable tariff structure and growing manufacturing infrastructure, is emerging as a key destination for Samsung. The company has already established some manufacturing presence in India, working with local partners. According to a report by Moneycontrol, Samsung is in talks with Indian contract manufacturers like Bhagwati (Micromax) and Dixon Technologies, both of which are current partners. Samsung is reportedly looking into utilizing its existing facilities in Uttar Pradesh and Chennai, while also outsourcing production to Indian EMS (Electronic Manufacturing Services) firms to produce smartphones, televisions, and home appliances for global export, including to the US.

Strengthening the ‘Make in India’ Initiative

Samsung’s potential shift comes as part of a broader trend where multinational companies are increasingly looking to India as a manufacturing hub. The Indian government’s Production-Linked Incentive (PLI) scheme, aimed at boosting local manufacturing and exports, has played a pivotal role in attracting companies like Apple, which has ramped up its local manufacturing efforts in recent years.

Earlier this week, it was reported that Alphabet Inc., the parent company of Google, is also exploring shifting part of its Pixel phone production from Vietnam to India, in collaboration with Foxconn and Dixon Technologies. This aligns with Samsung’s strategy of diversifying its supply chain and manufacturing capabilities in response to geopolitical challenges and rising trade barriers.

Conclusion

Samsung’s decision to explore manufacturing in India signals a shift towards diversification in its supply chain to mitigate risks posed by global trade tensions and tariffs. The move could significantly boost India’s electronics manufacturing sector, furthering the “Make in India” initiative and reinforcing the country’s position as a key player in the global tech supply chain. As Samsung looks to adjust its operations, the company’s collaboration with Indian manufacturers may create new opportunities for local businesses and contribute to India’s growing role in global electronics production.

Sources By Agencies