Key Points:
- Xiaomi urges India to address concerns hindering component suppliers’ operations.
- The company emphasizes the need for confidence-building measures and incentives for local manufacturing.
- Xiaomi advocates for further reductions in import tariffs to enhance India’s manufacturing competitiveness.
Xiaomi, the leading player in India’s smartphone market, has conveyed its concerns to New Delhi regarding the reluctance of smartphone component suppliers to establish operations in India. Citing apprehensions stemming from heightened scrutiny of Chinese companies by the Indian government, Xiaomi emphasized the need for confidence-building measures to encourage local manufacturing.
Xiaomi urged India to consider offering manufacturing incentives and reducing import tariffs for certain smartphone components. The company, which assembles smartphones in India using mostly local components alongside imports from China and other countries, highlighted the importance of addressing concerns related to compliance, visa issues, and other factors hindering component suppliers from setting up operations locally.
Muralikrishnan B., President of Xiaomi India, emphasized the necessity for the Indian government to instill confidence among foreign component suppliers to facilitate the establishment of manufacturing facilities in India. The letter underscored the significance of fostering an environment conducive to investment and manufacturing growth, particularly in the smartphone space.
While both Xiaomi and the Indian Information Technology Ministry refrained from further elaboration, the letter’s contents shed light on the ongoing challenges Chinese companies face in India. These challenges include regulatory scrutiny, executive visa restrictions, and slow investment clearances, all contributing to a complex business environment.
Xiaomi also advocated for further reductions in India’s import tariffs, citing the potential to enhance the country’s manufacturing competitiveness and lower costs. Specifically, the company proposed lowering tariffs on sub-components used in batteries, USB cables, and phone covers to incentivize local manufacturing.
The Indian government’s recent move to reduce import taxes on battery covers and phone camera lenses was noted, signaling a potential willingness to address industry concerns. However, Xiaomi emphasized the need for more substantial incentives to attract component manufacturers to India.
Against the backdrop of strained India-China relations following a 2020 border clash, Xiaomi’s outreach underscores the importance of fostering a conducive environment for foreign investment and manufacturing growth in India’s technology sector. As India navigates its regulatory landscape, the outcome will significantly impact the trajectory of tech industry players operating in the region.
