By Aditya Kalra and Nikunj Ohri
NEW DELHI, Sept 23 (Reuters) – India is investigating LG Electronics and Samsung for allegedly paying lower tariffs on imported display parts of high-end TVs, five sources told Reuters, putting under scrutiny the premium entertainment devices both South Korean giants have bet big on.
Lengthy import tariff and tax investigations have been a sore point for foreign investors in India and embroiled companies like Samsung and Volkswagen, though Indian officials say they are simply enforcing the law of the land.
The latest investigation concerns imports of display parts that go into making panels for OLEDs, or organic light emitting diode technology, which offer superior picture quality and are made by LG Electronics and Samsung in India, a key growth market for them.
The market for pricey OLEDs is still niche globally, however, with just 6.5 million units sold last year, research firm Omdia says. Counterpoint Research data shows India’s TV market was worth $4.7 billion last year, with OLEDs having a near 4% share.
Indian officials have alleged the companies wrongly claimed a concessional 5% tariff on imported OLED glass screens called open cells, arguing the rate has for years been reserved for the older LCD and LEDs which dominate mass-market sales, said the sources, who declined to be identified as the matter is confidential.
For OLED parts, India’s Directorate of Revenue Intelligence believes Samsung and LG should have paid a 15% duty, said two of the sources aware of the investigation.
The companies are privately opposing the position of Indian authorities as they believe OLED is nothing but an advanced form of LED technology and the same Indian tariffs should apply, the sources added.
The sources did not comment on the financial details of the amount of duty allegedly underpaid. Typically, following an investigation, authorities can issue tax demand notices and impose penalties of up to 100% of the duty evaded. Companies can legally challenge such demands in courts.
Samsung said in a statement to Reuters that it is “reviewing the matter and cooperating fully with the relevant authorities, adding it is firmly committed to complying with all laws.”
LG and the revenue directorate did not respond to queries.
SCRUTINY IN TV MARKET
Officers from the Directorate of Revenue Intelligence visited Samsung’s India headquarters in Gurugram near New Delhi to question officials in recent weeks, four sources said.
LG was instead sent written questions by Indian authorities on its OLED imports and has submitted its responses, along with a voluntary, unspecified monetary deposit to cover any extra duty that authorities may request, said one of the sources.
LG last year listed its India unit on Mumbai stock exchanges where it currently has a market capitalisation of nearly $12 billion. It said in August its TV segment was witnessing “very high-quality growth”, with its India TV market share around 26% and OLED share almost 59% in value terms.
Samsung also sells many OLEDs in India, with one Made in India 65-inch TV priced at $2,415. The company is contesting another $520 million India tax demand since last year for allegedly misclassifying imports of networking gear.
LOBBYING PUSH
While Indian authorities investigate LG and Samsung, their industry groups in August launched a campaign to push India’s IT ministry to recommend OLED display parts should be covered under the low, concessional duty regime of 5%.
In nearly identical confidential letters, the Consumer Electronics and Appliances Manufacturers Association and industry body MAIT said the tariff law “restricts the benefit” only to LCD and LED display parts, creating an “anomalous situation”.
“Manufacturers of more advanced OLED TVs are denied the same benefit, resulting in higher input costs and reduced competitiveness,” said the letters, reviewed by Reuters.
Government data shows India’s imports of displays including TV parts rose 15% in a year to $5.6 billion by March 2026, highlighting the nation’s reliance on such overseas supplies.
The industry is also lobbying for more exemptions on OLED display manufacturing overall, saying only old LCD technology manufacturing machines enjoy duty exemptions.
“This absence of parity results in higher capital costs for setting up OLED manufacturing,” said the letters. “This also hampers growth of manufacture of higher technologies in India and is thus against ‘Make in India’.”
The industry groups and India’s IT ministry did not respond to Reuters queries.
(Reporting by Aditya Kalra And Nikunj Ohri; Editing by Kim Coghill)
Comments