Asia

China investment cautious amid Indian scrutiny

China’s move to India despite India’s reliance on China to develop its mobile phone manufacturing ecosystem amid reports that India may limit Chinese vendors in the low-end smartphone market investment may slow further.

A few days later bloomberg When economic times India is looking at ways to limit the presence of Chinese vendors in the smartphone market below INR 12,000 (US$150), sources cited by their respective sources said. mint The Ministry of Electronics and Information Technology said it was not considering such a proposal.

according to mintNavkendar Singh, associate vice president of device research at , IDC India, South Asia and ANZ, said implementing such a ban presents its own challenges, and it will not be easy for remaining players to close the gap. I added that it is possible. Tarun Pathak, his director of research at Counterpoint Research, said he could not capture the market for less than INR 12,000 overnight with a few local firms.

Since Narendra Modi took office, India has initiated the Make in India and Phased Manufacturing program to develop the Indian mobile phone supply chain. Competition in China is fierce, and India’s mobile market and supply chain is underdeveloped.

according to JW Insight Consulting, the Chinese player’s market share in the Indian smartphone market quickly exceeded 50%. At the same time, many of his ODMs and assembly plants such as Wingtech, Xiaomi and Sunwoda have also accelerated their investment in India, helping India to become the second largest mobile phone producer in the world.

However, Indian authorities have started targeting Chinese companies due to geopolitical conflicts. In December 2021, India raided the offices of her Xiaomi and its contract manufacturer. Since 2022, India has imposed asset freezes and fines on Xiaomi, Oppo and Vivo for suspected money laundering or tariff evasion.

Mr. Wan Jun, Head of Shenzhen Jilian Consult, said: JW Insight Consulting India implemented a new policy in June requiring Chinese nationals to be approved by the Indian Ministry of Home Affairs before becoming directors of Indian companies, and for investments approved by the Indian government between 2020 and June 2022. Of these, over 370 were FDI applications from China, adding that only about 80 have been approved by the Indian government.

Restricting Chinese investment could undermine India’s mobile ecosystem. About 70% of India’s imports from China are intermediate and capital goods, according to UN Comtrade. The Portable Electronics Association of India has previously called on the Indian government to allow small Chinese investments in India to help build local supply chains.

according to SohuHonor CEO Zhao Ming confirms the team has pulled out of India for “obvious reasons”, with 80% of India’s small and medium-sized Chinese companies closed and many of the rest choosing to leave India. added. Even massive ones like Xiaomi struggle there for the same reason.

But there is a reason India is targeting Chinese companies. economic times The Chinese company owns the entire distribution channel and uses its vast financial resources to offer discounts, citing unnamed officials. JW Insight Consulting Oppo transferred mobile phone marketing rights to its Indian subsidiary. Additionally, Oppo has been in the red since his seven years of operations in India, and Indian officials believe Oppo has shifted profits from India to China.

Incentive policy for mobile phones in India

policy

Phased manufacturing program

PLI for large scale manufacturing

period

FY17~FY20

2022-27

explanation

Raise basic tariffs on mobile phones and parts

Provide tiered incentives or cashback for additional investments and sales beyond the base year (FY21)

participant

Xiaomi, Oppo, Vivo, Wintech, Huawei, Sunwoda, Samsung Electronics

Samsung Electronics, Foxconn, Wistron, Pegatron

Background

Global expansion of Chinese mobile phone companies

US-China trade war, Apple supply chain diversification, India concerns over Chinese investment

Created by DIGITIMES Asia in August 2022



https://www.digitimes.com/news/a20220811VL202/india-mobile-devices.html China investment cautious amid Indian scrutiny

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