Will India target China’s low-cost smartphone makers?

Will India target China’s low-cost smartphone makers?

In its continuing drive to boost local industry, it now seems that India is taking aim at low-priced smartphones from China of the sort sold in large quantities in the country by companies like Xiaomi.

A report from news service Bloomberg suggests that India has plans to restrict Chinese smartphone makers from selling devices cheaper than 12,000 rupees (a little over US$150), thus preventing high-volume brands like Realme and Transsion from undercutting local manufacturers.

In a market where many consumers enjoy only modest levels of disposable income even US$150 is a lot of course, but India’s entry-level market is nevertheless vast, as Chinese manufacturers have profitably discovered. They are estimated to take close to 80% of the low-cost smartphone market at the moment. It’s a market that contributes close to a third of India’s sales volume, according to recent figures.

As Bloomberg also points out, Chinese manufacturers have had little joy from Chinese consumers lately due to ongoing Covid lockdowns, so India is a key market for them.

This isn’t a done deal of course. And it’s not clear that indigenous companies can offer what consumers want. It’s also possible that China might cry foul given recent accusations of tax avoidance and other financial misdemeanours aimed at Xiaomi, Oppo and Vivo, among others, not to mention bans on Huawei and ZTE, cooling relations between China and India following a border clash last year, and bans on more than 300 apps.

Despite Indian accusations of unfair competition its’s hard to believe the government wants to lose a significant source of Chinese investment, but we still await a formal announcement to see how or whether the low-cost smartphone market is going to be disrupted.


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