TECHNOLOGY

Indian Government Not Happy With Low Export Numbers of Chinese Smartphone Brands

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India has witnessed massive growth in local production of smartphones. Companies like Apple, Samsung, Xiaomi, Realme, and OnePlus are some of the notable players in the market that manufacture smartphones within India.

While Apple and Samsung also export a huge batch of these locally produced devices overseas, Chinese brands on the other hand have a very low share in India’s exports. The GoI is not happy with this situation, as it not only wants brands to manufacture for Indian needs but also wants them to contribute to India’s export sector.

Dominance of Chinese Smartphone Makers in India

The Indian smartphone market is estimated to be a $40 billion industry making it one of the largest individual phone markets in the world. However, around 74% of this market is captured by the combined likes of Xiaomi, OPPO, Vivo, and Realme.

As per a recent statement from India’s IT Minister Ashwini Vaishnaw, over 99% of smartphones sold in India are manufactured locally in the country. This means that even though Chinese players have a commendable market share in this space, it is directly contributing to the growth of the Indian economy with job opportunities and various other indirect ways.

However, it has been highlighted that Chinese phone makers only focus on fulfilling the needs of the Indian market with its local production. Although they also export devices overseas, their contribution to exports is just 4% of the total smartphone exports done by the country.

On the flip side, Apple and Samsung are the biggest smartphone exporters in India. Both companies have set up huge facilities across the country to cater for the global market needs. For reference, out of India’s $11 billion worth of smartphones in 2023, $5 billion came from Apple and $4.5 billion came from Samsung.

Hence, the Government of India is not happy with Chinese players despite having the highest market share in the country, said a government official to the Economic Times requesting anonymity. These brands are not contributing to the ultimate goal of exporting smartphones to the world.

The reason that GoI wants companies to export units is because the GDP of the country depends on the difference between its imports and exports. If a nation has higher imports than exports, the deficit creates a negative impact on the economy. Hence, the government wants to maximize exports by capitalizing on the booming smartphone industry in India.

OPPO, Vivo, and Realme Hesitant on Indian Contract Manufacturers

Indian Smartphone Market Sees a Decline

While OPPO, Vivo, Realme, and OnePlus manufacture their devices in India, these companies produce smartphone units in their self-owned facilities across the country. Xiaomi on the other hand has partnered with India-based Dixon Technologies and even Foxconn, both of which are eligible for India’s performance-linked incentive (PLI) scheme.

The PLI scheme helps Xiaomi to gain multiple tax benefits and other business advantages to operate in India. Whereas OPPO, Vivo, Realme, and OnePlus, in short, the BBK Group, who have their own production plants cannot utilize the PLI scheme unless they turn towards an Indian contract manufacturer.

As per the Economic Times, these Chinese brands have already invested so much in setting up their own facilities and assembly lines that it is not feasible for them to turn towards Indian contract manufacturers. Due to these reasons, some Chinese OEMs are not keen on exporting from India. Instead, they prefer to export to global markets from their home facilities in China.

Apple has been India’s spearhead in smartphone exports. The US-based tech giant has been actively trying to reduce its dependency on China for its supply chain and has already considered India as its next big manufacturing hub.

As of today, India produces over 7% of the global iPhone volume, which is expected to further increase to 25% in the next few years. The Tata Group will also play an important role in this growth as it recently acquired Wistron’s iPhone facilities in India.

The GoI wants Chinese players to follow a similar approach by increasing the amount of exports. While Apple, Samsung, and even Xiaomi have aligned with the government’s vision, companies under the BBK Group have slightly upset GoI by following a different manufacturing approach.



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