Samsung Electronics and LG Electronics are under investigation by Indian authorities over allegations that they underreported tariffs when importing display components used in manufacturing OLED panels for premium TVs. If the allegations are confirmed, penalties of up to 100% of unpaid duties could be imposed on top of the outstanding tariff amounts.

On the 23rd (local time), Reuters reported, citing multiple sources familiar with the matter, that India’s Directorate of Revenue Intelligence (DRI) is examining suspicions of tariff underreporting related to the two companies’ imports of “open cells.” Open cells are display components used in producing OLED panels, which both companies use to manufacture premium TVs at their Indian facilities.

The core dispute centers on the applicable tariff rate for these components. India has applied a preferential 5% tariff on components related to legacy liquid crystal display (LCD) and light-emitting diode (LED) technologies. However, the DRI maintains that OLED components do not qualify for the preferential treatment and should be subject to a 15% duty. Investigators have visited Samsung Electronics’ Indian subsidiary headquarters in Gurugram, near New Delhi, over recent weeks to question executives and employees. LG Electronics received written inquiries and, in addition to submitting responses, has reportedly deposited funds voluntarily in escrow as a precaution against any additional tariffs authorities may demand.

The total amount of allegedly evaded tariffs has not yet been disclosed. In India, however, following an investigation, authorities can issue a tax payment notice along with penalties of up to 100% of the evaded amount, and companies can challenge these in court.

Samsung Electronics told Reuters it is “actively cooperating with authorities and reviewing the matter,” adding that it “remains committed to complying with all applicable laws.” LG Electronics and the DRI did not respond to requests for comment.

Both companies are privately contesting the Indian authorities’ interpretation, arguing that OLED is merely an evolved form of LED technology and should therefore be subject to the same tariff rate. Industry associations are voicing similar positions. The Consumer Electronics and Appliances Manufacturers Association (CEAMA) and the Manufacturers’ Association for Information Technology (MAIT) sent nearly identical letters to India’s Ministry of Electronics and Information Technology in August, requesting that OLED display components be included in the 5% preferential tariff framework.

In their letters, the associations pointed out that current tariff laws limit benefits to LCD and LED components only, creating an “anomalous situation.” They added that “manufacturers of more advanced OLED TVs are not receiving the same benefits, leading to higher input costs and weakened competitiveness,” and stressed that “this hinders the growth of advanced technology manufacturing in India and runs counter to the ‘Make in India’ policy initiative.”

The industry is also calling for broader tariff exemptions on OLED display manufacturing equipment overall. Currently, only machinery for legacy LCD technology manufacturing receives tariff exemptions, which the industry argues makes capital costs for establishing OLED production facilities relatively higher.

The Two Companies’ Standing in India’s TV Market

This investigation is notable because it is unfolding in India’s premium TV market, a segment both companies have strategically cultivated. According to market research firm Counterpoint Research, India’s TV market was valued at $4.7 billion last year, with OLED accounting for only about 4% of that total. OLED remains a niche segment globally as well, with worldwide sales volume reaching approximately 6.5 million units last year, according to Omdia.

Nevertheless, India represents a critical growth market for both companies. LG Electronics listed its Indian subsidiary on the Mumbai Stock Exchange last year, and its current market capitalization stands at approximately $12 billion. The company reported in August that its Indian TV market share was about 26% by value, with approximately 59% in the OLED segment. Samsung Electronics also sells multiple OLED products in India, with one locally produced 65-inch TV model priced at $2,415.

According to Indian government data, display imports, including TV components, reached $5.6 billion in the year ending March 2026, up 15% year-over-year. This underscores India’s significant reliance on overseas supply for related components.

A String of Tax Investigations Targeting Foreign Companies

India’s prolonged import tariff and tax investigations have long been a source of frustration for foreign investors. Global companies such as Samsung Electronics and Volkswagen have been caught up in similar probes. Indian authorities maintain they are simply enforcing the law, but for foreign companies, these investigations have served as a factor undermining predictability.

Separate from the OLED component matter, Samsung Electronics was assessed $520 million in taxes last year by Indian authorities over alleged misclassification of imported network equipment, and the company is currently pursuing legal action. Observers note that the addition of this OLED investigation could further increase the burden on Samsung’s business environment in India.