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Samsung opens world's largest mobile phone factory in India

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South Korean President Moon Jae-in and Indian Prime Minister Narendra Modi at the official opening of the Samsung Electronics smartphone manufacturing facility in Noida, India.

New Delhi

SAMSUNG Electronics opened the world's largest mobile phone factory in India, in a win for Prime Minister Narendra Modi's flagship programme to lure investors to manufacture in the South Asian nation.

The factory was inaugurated by Mr Modi and visiting South Korean President Moon Jae-in. This will double Samsung's Noida unit capacity for mobile phones to 120 million units a year from 68 million units a year, it said in a statement. The phase-wise expansion will be completed by 2020.

Smartphone makers from Xiaomi to Oppo are building factories in the world's fastest growing market for the product, bolstering Mr Modi's push to encourage overseas investors to "Make in India".

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Asia's third-largest economy attracted record foreign direct investment in the past year totalling US$62 billion, including reinvestment.

"The opportunity is just massive," said Faisal Kawoosa, who heads new initiatives at researcher CMR. "Such a large facility will help Samsung cater to the huge demand in a country of 1.3 billion people where there are only 425 million smartphone users."

India attracted the highest foreign direct investment in the past year with inflows totalling US$62 billion.

India's smartphone market grew 14 per cent with total shipments of 124 million units in 2017, the fastest pace of growth among the top 20 markets, according to International Data.

Demand for new phones is surging in India, helped in part by billionaire Mukesh Ambani offering US$23 4G feature-phones, free voice services and cheap data plans.

The new Samsung factory will have the capacity to fabricate 120 million smartphones per year, and make everything from low-end smartphones that cost under US$100 to the company's flagship S9 model, the maker said.

Indians favour low-end smartphones priced at US$250 or less, given the low average annual income, according to Bloomberg Intelligence.

That's one reason Apple struggled to gain market share in India, with most iPhone models priced beyond US$500, said a Bloomberg Intelligence 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 Systems. BLOOMBERG