LG to review mobile phone manufacturing in India

By agencies   |   Friday, 04 March 2005, 20:30 IST
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PUNE: LG Electronics, which is setting IndiaÂ’s first mobile phone manufacturing facility here is reviewing its plans after the Government proposed change in tax laws in the union budget. LG has already set up a plant at its Ranjangaon facility in the City and started assembling GSM phones with plans to manufacture them from July, however the recent budget proposal to increase customs duty on electronic goods to 4 percent from zero and reduction on import of finished goods from the present 5 percent to 4 percent has made the company to review its decision. "It does not make commercial sense to manufacture in India with this new duty structure," senior company official said adding, "It is easier to import finished handsets from China, there is no decision yet, but the plan is under review." LG had last year announced its decision to manufacture mobile phones in India and had started assembling phones in early February. Nokia and Hyundai too had revealed their plans to make mobile phones in India, the worldÂ’s fastest growing mobile phone market. "The plant has started assembling handsets but further expansion of capacity will depend on the feasibility of manufacturing which is very low at this moment," the official said.