LG Electronics Rethinking New Production Line in India
Mar 4, 2005
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LG Electronics Co, South Korea's second-largest electronics maker, is rethinking its plan to build a second handset production line in India as the Indian government plans to impose tariffs on electronics parts, a company source said.

Last October, LG Electronics said it would build the new handset production line at its plant in the city of Pune for U.S. $43 million.

Starting in April, the Indian government is planning to impose a new import tariff of 4 percent on electronics parts, while reducing an import tariff on finished electronics goods to 4 percent from 5.1 percent, the source said.

The move, if approved, may prompt LG Electronics to withdraw the idea of building the second production line in India because a scarcity of economic benefits from local handset-making, the source said.

"We are now closely watching the Indian government's move," said the source, who asked not to be identified.

The second line will have an annual production capacity of 2 million handsets, LG Electronics said in an earlier statement. (Yonhap)

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