Samsung to double mobile phone capacity at main Indian factory

FILE PHOTO: Customers shop at a Samsung mobile store inside a shopping mall in New Delhi, April 5, 2016. REUTERS/Anindito Mukherjee/File Photo

MUMBAI (Reuters) - Samsung Electronics plans to double the production capacity for mobile phones and fridges at its main factory in India, expanding in a country where U.S. rival Apple Inc. has started assembling phones.

The South Korean company said in a statement on Wednesday it would spend 49 billion rupees ($764 million) over three years to expand the factory on an additional 35 acres at the site on the outskirts of New Delhi. It also makes televisions at the plant.

India is the world’s second biggest smartphone market and its fast becoming a battleground for handset makers vying for a bigger share as sales in Asian powerhouse China start to lag.

“Samsung would want to reduce their dependence on manufacturing in Vietnam and shift more operations to India,” said Tarun Pathak, associate director at technology research firm Counterpoint.

“India looks like a promising manufacturing hub in the coming years and Samsung could make it their base for exports.”

Samsung’s expansion also comes at a time Indian Prime Minister Narendra Modi’s government is pushing to increase technology manufacturing through its flagship “Make in India” initiative launched in 2014.

Apple began assembling its iPhone SE model last month in the southern Indian technology hub of Bengaluru and a government official has said it could increase the local share of production over time.

Reporting by Sankalp Phartiyal; editing by Devidutta Tripathy and David Clarke