New Delhi, September 28, 2026 — A high-stakes tax battle is unfolding at India’s ports, threatening to disrupt the country’s booming premium television market. South Korean electronics titans Samsung and LG have found themselves in the crosshairs of the Directorate of Revenue Intelligence (DRI), which has initiated a sweeping inquiry into how these tech giants classify imported components for their flagship OLED TVs.
At the heart of the dispute is a bureaucratic tug-of-war over technological definitions—a clash that could dictate whether manufacturing next-generation electronics in India remains a profitable venture.
The Sticking Point: The 5% vs. 15% Debate
To boost local manufacturing and the “Make in India” initiative, the government has historically offered a concessional 5% customs duty on the import of “open-cell” panels—the core, unbacked display sheets used to assemble LCD and LED televisions locally.
However, the DRI is now challenging the application of this discount to newer technologies. Revenue authorities contend that OLED (Organic Light-Emitting Diode) is a fundamentally different and highly advanced technology that does not legally fall under the traditional LCD/LED concessional umbrella. Consequently, the DRI argues that imported OLED open-cell panels should attract the standard, un-discounted import duty of 15%.
For manufacturers, this 10% delta is massive. A sudden tripling of the import tax on their most expensive core component completely upends the pricing strategy for locally assembled premium televisions.
The Financial Toll: Margin Compression at the Worst Time
The timing of this customs scrutiny could not be worse, particularly for Samsung. The regulatory headache arrives just as Samsung India released its FY26 financials, exposing severe margin compression across its operations.
The company reported a sharp 36% decline in net profit, plummeting to ₹7,228 crore. The drop was largely driven by a global surge in raw component prices, semiconductor shortages, and escalating storage and logistics costs. Slapping an unexpected 15% tax on their flagship OLED parts threatens to squeeze these already vulnerable margins even further, potentially forcing the company to pass the costs onto Indian consumers.
The “Make in India” Paradox
Industry experts warn that the DRI’s strict interpretation could trigger a dangerous paradox for India’s manufacturing ambitions. The government’s broader goal is to incentivize companies to assemble products locally rather than importing finished goods.
However, by taxing the technology of the future (OLED) at a punitive 15% while subsidizing the technology of the past (LED) at 5%, the policy inadvertently punishes innovation. If assembling OLED TVs locally becomes mathematically unviable due to high component taxes, tech giants may simply choose to manufacture the panels in Vietnam or South Korea and import the finished TVs instead—effectively exporting the assembly jobs India wants to keep.
The Bottom Line: A Precedent for Future Tech
The DRI probe is more than just a routine tax dispute; it is a critical test case for how India’s outdated tariff structures adapt to rapid technological evolution. As the lines blur between legacy hardware and next-generation displays, the resolution of this Samsung and LG standoff will set a legal precedent. It will signal to the global market whether India’s tax regime is agile enough to support the future of high-tech manufacturing, or if bureaucratic rigidities will stall the assembly lines.
