India should adopt simpler tax regime: Samsung CEO
Jong-Yong Yun
K T Jagannathan
CHENNAI: Jong-Yong Yun, Vice-Chairman and Chief Executive Officer (CEO) of Samsung Electronics Co. Ltd. of Korea, has suggested India to adopt a simpler tax regime and pave way for a demand-led growth in the consumer electronics field.
In an interview with this correspondent here recently, Mr. Jong-Yong Yun said the ``Indian tax regime is complicated''. At around 33 per cent, the composite tax on consumer electronics products in India was twice that in China, he said. As such, securing market space in India took more time, he said.
Mr. Jong-Yong Yun was here to participate at the inauguration of Samsung's plant at Sriperumbudur.
Fielding a range of questions on doing business in the two most populated nations - China and India, the CEO said both countries had excellent `talent force'. Since India started its industrialisation a little late, ``it has some ways to go forward in terms of industrial infrastructure,'' he said. ``India requires still more improvement'' vis-à-vis business and regulatory environment, he said.
At $1.3 billion, sales from Indian operations contributed roughly to 1.7 per cent of Samsung's global revenue, he said. The Vice-Chairman expressed optimism that the contribution of India to Samsung's global sales would more than double three years hence. In this context, he said the China contributed close to 18 per cent of the company's global sales at the moment. It may, however, be noted that Samsung entered China long before it made a foray into India sometime in 1995. Mr. Jong-Yong Yun asserted that Indian R& D (research and development) operations could play a ``significant role'' in the digital TV technology and mobile handset spheres. In this context, he acknowledged the strength of India in the IT and digital software fields. Globally, Samsung employs around 32,000 people for its R&D works. Roughly seven per cent of its R&D personnel are employed in India.
Though India is behind China, the CEO asserted that ``it (India) is the next largest growth market'' for Samsung. ``We are very much focussed on India and India is a very important market for us,'' he said, pointing to the product development and manufacturing facilities at Noida. The opening of its second facility at Sriperumbudur near here last Tuesday sort of reiterated Samsung's stand, he pointed out.
He said Samsung's competitive edge revolved around its product development capability and time-to-market ability. ``Cost wise we are similar to competition otherwise,'' he said. Mr. Jong-Yong Yun said Samsung would like to be ``a global company''. Sixty per cent of its employees were outside Korea and close to 85 per cent of its revenue came from sales outside Korea, he said. Conceding that the labour cost in countries such as India and China had gone up, he said these were growing and expanding markets. It made enough sense for Samsung to continue to invest in these markets.
Mr. Jong-Yong Yun wanted Samsung to be known as a ``brand you can trust and its products you wish to have.''
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