India has no plans to restrict Chinese mobile phone makers

India has no plans to restrict Chinese mobile phone makers

The Indian government has no plan to restrict Chinese companies from the entry-level smartphone market, top government officials said.

“There is no such proposal under consideration at the ministry of electronics and information technology,” said a person aware of the developments within the government, in response to reports suggesting that the government intended to restrict Chinese players from selling phones less than 12,000, comprising the entry-level and affordable mobile phone segments in smartphones and feature phones.

Chinese companies have captured 63% of the Indian smartphone market, with entities such as Xiaomi, Realme, Oppo and Vivo taking up four of the top five spots, according to data from Counterpoint Research as of the quarter ended June.

Chinese firms have 75-80% share in sub $ 150 segment that contributes to 31% of overall smartphone market. Most Chinese companies manufacture in India, and supplies to the market are met largely by local production.

According to industry insiders, the government has been made aware of the declining share of local players, such as Lava, Micromax, Karbonn and Intex, in the Indian market, with the industry seeking policy measures and support to create ‘Indian Champions.’

However, many of these companies neither have the manufacturing scale nor the marketing might to compete with their Chinese counterparts.

“Implementation of such a ban will have its own challenges related to its execution with India being an open channel market, and the remaining players may not find it easy to fill the gap with the products in their portfolio,” said Navkendar Singh, associate vice-president for devices research at IDC India, South Asia & ANZ.

“An outright ban is unlikely but overall restricting certain players on the basis of segment might lead to an unstable ecosystem. Sub- 12,000 is roughly a $5 bn category and only two or three local players currently can’t take it over night,” said Tarun Pathak, research director at Counterpoint Research. He added that Indian brands needed a strong portfolio, distribution and after sales services mix, which was currently missing.

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Author: Shirley