Samsung could cease producing flagship phones like the Galaxy S9 and Note9 in India, reduce local smartphone manufacturing and exports of smartphones, if the Indian government does not rethink its recent actions.
India's Phased Manufacturing Program (PMP) is the issue here. PMP aims to promote production of components in India and is expected to be effective in March 2020. imposed on 10% duty tax (that could end up being 11%) on any imported components.
In this case, Samsung is not yet able to make it and needs to import. The display accounts for 25% -30% of a phone's cost and would increase manufacturing costs significantly if taxed.
Samsung India has reportedly told the Indian government that it will need to stop manufacturing its flagship phones in the country and the manufacturing of mid-range and entry-level smartphones.
Samsung is currently setting up a local factory that would be produced by April 2020.
Samsung has ceased making TVs in India last quarter because of the new 5% duty on open cell Allegedly the Indian government is considering doing a turn and removing the tax.