India seeks to ban Chinese phones cheaper than Rs.12,000 aiming to push Chinese giants out of the lower segment of the world’s second-biggest mobile market.
Mumbai: India is trying to restrict Chinese smartphone makers from selling devices cheaper than 12,000 rupees to boost its ailing domestic industry, a report by Bloomberg said today.
The move is aimed at ousting the Chinese giants from the bottom end of the world’s second-largest mobile phone market, according to people familiar with the matter. This coincides with growing concerns over high-volume brands like Realme and Transsion undermining local manufacturers, they said, asking not to be identified to discuss a sensitive topic.
Shutting out India’s entry-level market would hurt Xiaomi and its peers, which have increasingly relied on India to drive growth in recent years as its home market suffers from a slump. series of Covid-19 lockdowns that cripple consumption. Smartphones under $150 contributed a third of India’s sales volume in the quarter ending June 2022, with Chinese companies accounting for up to 80% of those shipments, according to the market tracker Counterpoint.
Xiaomi shares extended losses in the last few minutes of trading in Hong Kong on Monday. It fell 3.6%, extending the decline to more than 35% this year. It is unclear whether Prime Minister Narendra Modi’s government will announce policies or use informal channels to communicate its preference to Chinese companies, people said.
New Delhi has already subjected Chinese companies operating in the country, such as Xiaomi and rivals Oppo and Vivo, to careful scrutiny of their finances, leading to tax demands and money laundering allegations. The government previously used unofficial means to coerce Huawei Technologies Co. and ZTE Corp. telecommunications equipment. While there is no official policy banning Chinese network equipment, wireless carriers are encouraged to purchase alternatives.
The move shouldn’t affect Apple Inc. or Samsung Electronics Co., which make their phones more expensive. Representatives of Xiaomi, Realme and Transsion did not respond to requests for comment. Spokespeople for India’s ministry of technology also did not answer Bloomberg News inquiries.
India stepped up pressure on Chinese companies in the summer of 2020 after more than a dozen Indian soldiers were killed in a clash between two nuclear-armed neighbors on the Himalayan border. It has since banned more than 300 apps, including Tencent Holdings Ltd.’s WeChat and ByteDance Ltd.’s TikTok, as relations between the two countries deteriorate.
Local companies like Lava and MicroMax accounted for just under half of smartphone sales in India before new entrants from the neighboring country disrupted the market with affordable and versatile devices.
Chinese smartphone gamers now sell the vast majority of devices to India, but their market dominance is not “based on free and fair competition,” India’s minister of technology told Business Standard newspaper last week. The recurring annual losses of most of the Chinese phone makers in India, despite their leadership position, add to the criticism of unfair competition.
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