Korean trade body upset as PLIs stuck
livemint.comNEW DELHI : India has unfairly withheld from South Korean companies the incentives they were promised under the government’s production-linked incentive (PLI) schemes, the New Delhi chief of a top Korean trade body said. Arbitrary policy changes are a key concern for Korean companies investing in India, Lee Young-Ho, chief trade representative at the New Delhi office of the Korea International Trade Association (KITA), said in an interview. This is the first time that a Korean trade body has remarked on the challenges related to the PLI scheme.
“Another worry that Korean companies have had is the lack of stability of the policies of the government. For example, while the PLI scheme was very open in attracting foreign investment when it comes to the production process, there have been a lot of cases where companies have not received their incentives," said Lee, whose organization represents the interests of Korean global trade in India. The development comes even as KITA has seen an uptick in interest from Korean firms looking to invest in India as part of a diversification strategy.
Lee said Korean firms have found China’s business climate increasingly difficult in recent years. Countries in Southeast Asia are expected to be prime beneficiaries as Korean giants diversify production away from China. “Policies change quickly and easily, and after coming in, the firms have not received the incentives promised," said Lee.
This could hold back investors, he added. Lee did not cite specific instances; but recent media reports said the government withheld incentives claimed by Samsung Electronics Co. Ltd in the first year of the scheme totalling ₹900 crore on the sales of about ₹15,000 crore, citing invoicing discrepancies.
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