India is seeking to restrict Chinese smartphone makers from selling devices cheaper than 12,000 rupees (US$151) to kickstart its faltering domestic industry, dealing a blow to brands including Xiaomi Corp (小米).
The move is aimed at pushing Chinese giants out of the lower segment of the world’s second-largest mobile market, people familiar with the matter said.
It coincides with mounting concerns about high-volume brands such as Realme Mobile Telecommunications Co (銳爾覓移動通信) and Transsion Holdings Co (傳音控股) undercutting local manufacturers, the sources said.
Photo: Bloomberg
Exclusion from India’s entry-level market would hurt Xiaomi and its peers, which in recent years have increasingly relied on India to drive growth while their home market endures a series of COVID-19 lockdowns that crippled consumption.
Smartphones under US$150 contributed to a third of India’s sales volume for the quarter through June this year, with Chinese companies accounting for up to 80 percent of those shipments, according to market tracker Counterpoint.
It is unclear whether Indian Prime Minister Narendra Modi’s government plans to draft any policies or use informal channels to convey its preference to Chinese companies, the people said.
New Delhi has subjected Chinese firms operating in the country — such as Xiaomi, Oppo Mobile Telecommunications Corp (歐珀) and Vivo Communication Technology Co (維沃) — to close scrutiny of their finances, which has led to tax demands and money laundering allegations.
The government has previously employed unofficial means to ban Huawei Technologies Co (華為) and ZTE Corp (中興通訊) telecom equipment. While there is no official policy prohibiting Chinese networking gear, wireless carriers are encouraged to purchase alternatives.
The move should not affect Apple Inc or Samsung Electronics Co, which price their phones higher.
India increased pressure on Chinese firms in the summer of 2020 after more than a dozen Indian soldiers died following a clash on a disputed Himalayan border. It has since banned more than 300 apps, including Tencent Holdings Ltd’s (騰訊) WeChat and ByteDance Ltd’s (字節跳動) TikTok.
Homegrown companies such as Lava International Ltd and MicroMax Informatics Ltd comprised just under half of India’s smartphone sales before new entrants from the neighboring country disrupted the market with cheap and feature-rich devices.
Chinese smartphone players now sell the vast majority of devices in India, but their market dominance has not been “on the basis of free and fair competition,” Indian Minister of State for Electronics and Information Technology Rajeev Chandrasekhar said in an interview last week.
Recurring annual losses posted by most Chinese handset makers in India add to criticism of unfair competition, despite their leading position,
In private, the government continues to ask Chinese executives to build local supply chains and distribution networks while exporting from India, suggesting that New Delhi still desires their investment, the people said.
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