Xiaomi, Oppo, Vivo in talks with Indian firms to manufacture phones for global export

| |


Three of China’s biggest smartphone brands have entered talks with Indian manufacturers to manufacture phones locally for export worldwide, a concrete step towards establishing the country as a hub for electronics production.

Xiaomi, Oppo and Vivo are in talks with Indian contract phone makers in hopes of taking advantage of cash incentives readily available to local firms, people familiar with the matter said. If they continue, the plan is to get Lava International. and Dixon Technologies to assemble the phones and begin exporting from their plants as early as this year, they said, declining to be cited in sensitive negotiations.

Such a collaboration would be a milestone for an industry increasingly dominated by Chinese brands. China is both the world’s largest consumer and maker of smartphones, but Xiaomi and its rivals are looking for ways to expand globally as their home market plateaus. Oppo and Vivo have started talks with Lava while Xiaomi is courting Dixon, people said.

Both groups are seeking government financial incentives linked to manufacturing capacity, a program designed to make India more competitive as an electronics manufacturer. Chinese executives are expected to start visiting Lava and Dixon factories once Covid travel restrictions lift, one person said.

Representatives from Lava, Dixon, Xiaomi and Oppo did not respond to requests for comment. A Vivo spokesperson referred to earlier statements about the phone maker’s goal of exporting from India by the end of 2022.

The government has long urged foreign brands to boost exports in exchange for access to India, the world’s fastest-growing smartphone market. More broadly, manufacturers worldwide are looking for ways to reduce their reliance on a China-centric supply chain following a bitter trade war with the US and pandemic-related shipping restrictions.

In addition to Southeast Asia, India is emerging as an alternative.

“India is making the most of the technological cold war between the US and China and now China and Taiwan to strategically increase electronics manufacturing,” said Priya Joseph, Policy Analyst at Counterpoint. “Having persuaded phone makers to manufacture in India for the domestic market, the government is preparing the ground for the next stage of the phone export battle.”

India’s mobile exports have skyrocketed since the government introduced the Production-Linked Incentive (PLI) scheme in 2020. Mobile exports are expected to top 450 billion rupees ($5.9 billion) by the end of March, a 30-fold jump in five years. according to the India Cellular & Electronics Association.

“We anticipate another 10x growth through 2026, based on the key pillars of the global value chain ecosystem of Apple and Samsung, as well as big domestic companies like Lava,” said Pankaj Mohindroo, chairman of the association. “India will reach about US$60 billion (about Rs.458,628 billion) in exports by 2026.”

Since its unveiling in mid-2020, several big names have signed up for the government stimulus scheme, which at the time was expected to help create US$150 billion (around Rs.

Apple’s key suppliers Foxconn, Wistron and Pegatron were among the first to commit, along with Lava and Dixon. Since then, the government has extended similar stimulus plans to a variety of electronics from laptops to semiconductors.

While Delhi has banned Chinese apps and services from TikTok to games, the government is welcoming foreign manufacturers who can push ahead with their longer-term ambitions.

Xiaomi, Oppo and Vivo have started shifting capacity to India in recent years. This has helped the country become the second largest mobile phone manufacturer and assembler by volume. According to Amitabh Kant, chief executive officer of government think tank Niti Aayog, a few hundred factories are now making both basic feature phones and smartphones, up from just two in 2014.

The bulk of these are phones that remain in the Sub-Rs. 10,000 price range. Some of the largest domestic contract phone manufacturers are already exporting equipment made in India. For example, Lava exports to the US and Africa, while Dixon makes Motorola phones for the US market.

© 2022 Bloomberg LP






Source link

Previous

Where to get the best deal when pre-ordering Apple’s new iPad and iPad mini tablets

iOS 15.4 with Face ID Unlock while wearing a mask, iPadOS 15.4 and macOS Monterey 12.3 are coming next week

Next

Leave a Comment