LG Electronics of Korea has merged its telecommunications company in India, LG Electronic Systems, with its wholly owned consumer electronics manufacturing subsidiary, LG Electronics India Ltd.
The move means that the CDMA phones and the telecom equipment business that was run through LG Electronic Systems until now will be carried out through a separate division of LG Electronics India. LG is planning to launch a range of CDMA and GSM phones in the country.
The company has sought clearance from the Foreign Investment Promotion Board (FIPB) for the merger. It has also sought government permission to increase royalty from one per cent of domestic sales to 3 per cent. Royalty on exports from India will also be at the rate of 3 per cent of sales. The government currently allows MNCs to charge royalty at 5 per cent of domestic sales and 8 per cent of exports from their Indian subsidiaries.
A LG executive said the government has been informed of the merger.