India's New Policy May Hit Chinese Smartphone Makers Hard – BusinessKorea

The Indian government may oust Chinese smartphone makers from the sub-US$150 segment.

The Indian government is considering restricting the sale of low-priced Chinese smartphones under US$150 in the country, Bloomberg reported on Aug. 8 (local time).

According to the report, India is seeking to restrict Chinese smartphone makers from selling devices cheaper than 12,000 rupees (US$150) to kickstart its faltering domestic industry.

Chinese smartphone makers have recently relied more on the Indian market instead of the Chinese market as consumption has stagnated in China due to a lockdown caused by the re-spread of COVID-19.

The report said if the new policy is implemented, it will hit Chinese smartphone makers hard, including Xiaomi, Realme and Transsion. In contrast, Apple and Samsung Electronics, which sell models priced at over US$150, will not be significantly affected by the policy.

Low-priced smartphones under US$150 accounted for two-thirds of the total smartphone sales in India as of June, according to market research firm Counterpoint. Chinese smartphones accounted for 80 percent of the segment.

Bloomberg expected the policy to pull down Xiaomi’s smartphone shipments by 11 to 14 percent annually and sales volume by 4 to 5 percent. According to U.S. market research firm IDC, India is one of Xiaomi’s most important overseas markets, with its share reaching 25 percent. In India, 66 percent of Xiaomi’s smartphones are priced below US$150.

India recently investigated Chinese smartphone makers Oppo and Vivo and confiscated funds from them on charges of tax evasion and money laundering. Honor, another Chinese smartphone maker, withdrew its employees from India.

India has ramped up pressure on Chinese companies after clashes with Chinese troops in Ladakh, a border region east of northern Kashmir, in June 2020. India has banned the use of 300 smartphone apps from Chinese companies, such as WeChat and TikTok. The Indian government is also known to encourage telecom operators to purchase alternatives to Chinese telecom equipment from Huawei and ZTE.

However, Bloomberg said the Indian government wanted Chinese companies to invest in India, including building supply and distribution networks in India.


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