Apparently, the Indian government plans to give homegrown brands like Micromax, Lava, Karbonn, and others a boost by curbing the sale of low-end smartphones from China. The report stated that the country (India) wanted to restrict Chinese manufacturers from selling smartphones below Rs 12,000 ($150).
People close to the matter say the move may force Chinese smartphone makers to exit. It’s the second-largest mobile market in the world. In the sub-$150 (Rs 12,000 and below) segment in India, Xiaomi and Realme have captured about half the market share. If the government’s intentions prove to be true, these companies are likely to suffer a significant loss of market share.
Research director Pathak says, “Chinese brands dominate 75-80 percent of these volumes. Because Jio PhoneNext has ramped up in the last few quarters. This segment is currently dominated by Realme and Xiaomi with 50 percent share.”
He also adds, “Overall, sub-$150 smartphones contributed to 31 percent of the total smartphone volumes in India in the June quarter this year, compared to 49 percent in the same quarter in 2018,”
Shenzhen-based Transsion Holdings also dominates the low-end and affordable segments in the country with its brands like Tecno, Infinix, and Intel. Intel, Infinix, and Tecno, brands of the Transsion Group, captured 12 percent of the Indian handset market in the second quarter.
Additional information
Chinese manufacturers have already faced tough repercussions in India, as evidenced by recent raids on OPPO, Vivo, and Xiaomi. OPPO, Vivo India, and Xiaomi were investigated by the Indian government for alleged tax evasion. The Directorate of Revenue Intelligence (DRI) served notices to OPPO India, Xiaomi India, and Vivo India last week for duty evasion.
In a written reply, Sitharaman said that five cases of customs duty evasion had been registered against Xiaomi Technology India, as a result of the investigation conducted by the DRI. The show-cause notice has been served on OPPO Mobiles India Ltd demanding Rs 4,403.88 crore.
DRI discovered Vivo Mobile India Private Ltd evading customs duty to the tune of Rs 2,217 crore. Vivo India has served with a show-cause notice demanding payment of customs duty amounting to Rs 2,217 crore.
Information about not banning the smartphones
When it comes to smartphone making, China-based companies hold a big market in India. Thus, phones under Rs 12000 shouldn’t be banned. However, there are certainly main rumors surrounding India’s banning of Chinese smartphones.
To generate a strong foundation for homegrown brands in India, there were multiple reports that claimed about the government initiatives to Chinese smartphones ban. However, confirmed by CNBC TV-18 in a report that there’s no such ban implemented. Along with this, it also claimed that this move wasn’t even initiated.
This is how Chinese OEMs contribute to India
It said that enforcing such bans might become hard. Shortly, It would be difficult to enforce such a ban even if the government considered it. It is estimated that Chinese OEMs account for close to 78 percent of the Indian smartphone market, according to a report by Mint. More than three out of 10 smartphones in the sub-Rs 12,000 categories are sold in India.
In comparison, Micromax, Lava, and Karbonn, which make up just around 1 percent of Indian smartphone sales, make up nearly 20 percent of the US market. Aside from this, Chinese OEMs have also invested in setting up assembly plants in the country. It includes Xiaomi, Realme, and Vivo, which accounted for more than 50 percent of all smartphones sold in India.
