The central government is aiming to put some restrictions on Chinese smartphones holding the Indian market. Made-in-China giants like Xiaomi and others have managed to capture around 75% of the country’s smartphone market over the years. With the huge availability of cheap labour back in China, cutting-edge technological innovation, the expanding reach of digital literacy in India and the relative absence of Indian businesses in this field, Chinese smartphone makers have been making great strides and fortunes.
State of Affairs
The step is being seen as an attempt to revive the minuscule India-born industry in this sector. Despite being the second largest smartphone market in the world, Indian manufacturers have rarely been seen playing front-foot in this domain. A few known names like Lava and Micromax had even less than half of the market amid Apple and Samsung. And then, the new entrants from our neighbourhood disrupted the industry with cheap products. But now, pushing the ‘Make in India’ initiative after the Covid setback, the government aims to build back better, and newer.
After the clash at the Himalayan border between the two nuclear powers in 2020, India has taken steps to reduce the Chinese presence and appeal. It banned around 300 apps, like Tencent Holdings Ltd.’s WeChat and ByteDance Ltd.’s TikTok.
The Financial State
These makers have been facing money laundering allegations, amid the government scrutinizing them for finances. Tax demands on such companies have also increased in recent years. Xiaomi’s shares have been facing losses in trading. At the Monday closing in Hong Kong, it slid 3.6%, extending its decline to more than 35% this year. They are undergoing a tough phase in their home country due to covid lockdown and the entailing market slowdown. With restriction clouds hovering over their sub-Rs 12000 smartphones in India, the business is only going to hit another low.