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NEW DELHI: In a major victory for the government’s efforts to make India a global manufacturing hub for electronics and smartphones, top Chinese companies such as Vivo, Oppo and Xiaomi have agreed to export India-made devices to countries around the world, giving away a slice of critical manufacturing output from their Chinese factories.
Export of the Made-in-India smartphones by Chinese companies would mean a shift in their manufacturing strategy as it will perhaps be the first time that they share their global production volumes with India and open up their world markets, something that they have steadfastly refused to do till now.
Sources said that all the three top Chinese makers have now finalised elaborate plans to begin exports from India — mirroring the steps taken by American giant Apple and Korean Samsung — and potential overseas markets could be in Africa, the Middle East, Latin America and even Europe, apart from neighbouring countries.
The change in strategy comes amid the government's strategy to discourage or slow down investments from China following the Covid-19 pandemic and the tensions in Ladakh. Not only have Chinese investments been taken off the automatic approval route for FDI but several companies have seen their clearances getting stuck. Besides, Chinese telecom companies are not on the preferred list of suppliers and several of them are facing tax investigations.
“The government’s programmes such as production-linked incentive (PLI) schemes – that offer benefits on local sourcing in India – are being seen as a major reason for the change in strategy of the companies who are also under increased pressure from the government to export devices,” multiple sources told TOI, adding that local contract manufacturers such as Optiemus Infracom and Dixon are being scouted for “deals and agreements”. The government has also made it clear that all Chinese investments even under the PLI route would require its approval.
But Vivo already started to test the waters when it comes to exports from India, although the company faced an incident recently where its products worth $15 million — that were meant for exports — were blocked by DRI over misdeclaration around the value and make of devices. The company sees the regulatory action as an “aberration”, but believes that it will not disturb its broader plans to begin exports from India. Oppo is also “aggressively pushing” for an export strategy out of India, while Xiaomi – the biggest Chinese smartphone company in India – is also working on plans, the sources said. When contacted, Oppo and Vivo did not comment to a detailed questionnaire on the matter.
Xiaomi India boss Muralikrishnan B said that export plans are being firmed up. “We are aligned with the (Indian) government’s vision of making India a $5 trillion economy by 2025-26, and ensuring that India emerges as a significant electronics manufacturing base, including smartphone exports,” Muralikrishnan, president of Xiaomi India, said, adding that the company has so far been doing limited exports to neighbouring countries such as Nepal and Bangladesh. “To scale this further, cost challenges, as well as global macroeconomic factors, are headwinds that need to be overcome. We will try and work around these challenges in due course,” he said.
Sources said that the government has “almost made it a pre-condition” for the companies to begin smartphone exports from India, something that is being aggressively pursued by Samsung and Apple. While Samsung exported phones worth $2.8 billion during the April to October period this year, Apple – which is making iPhones at factories of Foxconn, Wistron and Pegatron in India — is understood to have shipped devices to the tune of $2.2 billion.
In comparison, the Chinese makers have negligible numbers despite having a lion’s share of the domestic Indian market.
Rajeev Chandrasekhar, the Minister of State for IT and Electronics, and his senior cabinet colleague Ashwini Vaishnaw have time and again stressed the need to boost electronics manufacturing in India that should also be directed at export markets too.
Sources said that the Chinese companies are also eager to begin exports as they want to “prove their seriousness around Indian manufacturing” at a time when they face multiple regulatory challenges in India, including inquiries by the Income Tax Department and the Enforcement Directorate.
@Hellfire2006 @SSBN81 @langda khan @Skull and Bones @VkdIndian @Raj-Hindustani
Export of the Made-in-India smartphones by Chinese companies would mean a shift in their manufacturing strategy as it will perhaps be the first time that they share their global production volumes with India and open up their world markets, something that they have steadfastly refused to do till now.
Sources said that all the three top Chinese makers have now finalised elaborate plans to begin exports from India — mirroring the steps taken by American giant Apple and Korean Samsung — and potential overseas markets could be in Africa, the Middle East, Latin America and even Europe, apart from neighbouring countries.
The change in strategy comes amid the government's strategy to discourage or slow down investments from China following the Covid-19 pandemic and the tensions in Ladakh. Not only have Chinese investments been taken off the automatic approval route for FDI but several companies have seen their clearances getting stuck. Besides, Chinese telecom companies are not on the preferred list of suppliers and several of them are facing tax investigations.
“The government’s programmes such as production-linked incentive (PLI) schemes – that offer benefits on local sourcing in India – are being seen as a major reason for the change in strategy of the companies who are also under increased pressure from the government to export devices,” multiple sources told TOI, adding that local contract manufacturers such as Optiemus Infracom and Dixon are being scouted for “deals and agreements”. The government has also made it clear that all Chinese investments even under the PLI route would require its approval.
But Vivo already started to test the waters when it comes to exports from India, although the company faced an incident recently where its products worth $15 million — that were meant for exports — were blocked by DRI over misdeclaration around the value and make of devices. The company sees the regulatory action as an “aberration”, but believes that it will not disturb its broader plans to begin exports from India. Oppo is also “aggressively pushing” for an export strategy out of India, while Xiaomi – the biggest Chinese smartphone company in India – is also working on plans, the sources said. When contacted, Oppo and Vivo did not comment to a detailed questionnaire on the matter.
Xiaomi India boss Muralikrishnan B said that export plans are being firmed up. “We are aligned with the (Indian) government’s vision of making India a $5 trillion economy by 2025-26, and ensuring that India emerges as a significant electronics manufacturing base, including smartphone exports,” Muralikrishnan, president of Xiaomi India, said, adding that the company has so far been doing limited exports to neighbouring countries such as Nepal and Bangladesh. “To scale this further, cost challenges, as well as global macroeconomic factors, are headwinds that need to be overcome. We will try and work around these challenges in due course,” he said.
Sources said that the government has “almost made it a pre-condition” for the companies to begin smartphone exports from India, something that is being aggressively pursued by Samsung and Apple. While Samsung exported phones worth $2.8 billion during the April to October period this year, Apple – which is making iPhones at factories of Foxconn, Wistron and Pegatron in India — is understood to have shipped devices to the tune of $2.2 billion.
In comparison, the Chinese makers have negligible numbers despite having a lion’s share of the domestic Indian market.
Rajeev Chandrasekhar, the Minister of State for IT and Electronics, and his senior cabinet colleague Ashwini Vaishnaw have time and again stressed the need to boost electronics manufacturing in India that should also be directed at export markets too.
Sources said that the Chinese companies are also eager to begin exports as they want to “prove their seriousness around Indian manufacturing” at a time when they face multiple regulatory challenges in India, including inquiries by the Income Tax Department and the Enforcement Directorate.
@Hellfire2006 @SSBN81 @langda khan @Skull and Bones @VkdIndian @Raj-Hindustani
