On April 1st, a production-linked incentive scheme for India’s large electronics manufacturing industry (PLI) drafted by India’s Ministry of Telecommunications and Information Technology was officially released, under which India will spend more than Rs 400bn over the next five years to stimulate the development of electronics manufacturing, including smartphones.
Four months later, the program’s application period expired on July 31st, with 22 companies from Germany, Austria and elsewhere filing, including Samsung of South Korea and Apple in the United States, while Foxconn, Weitron, and Su-Soo are also on the list.
The list includes Local Indian companies such as Lava, Dixon, Micromax, Padget Electronics, Sojo, Optiemus Electronics, etc.
As the world’s absolute leading mobile phone design and manufacturing industry chain, no manufacturer has entered the list. Chinese smartphone makers Xiaomi, OPPO, Vivo and OnePlus, which have factories in India, are also on the list.
In an interview with people in India’s local industrial chain, the IT Times has shown some relativepessimism. “What’s the Indian market doing this year?” “A sigh” “it’s cold.” For industry insiders who have been crawling through the Indian market all year round, the policy risks have become clear, and companies and individuals must be well prepared.
Some Indian industry figures are already looking to tap into other overseas markets, says one local market leader: “We’ve started to investigate other markets.” “
“Modi’s government can only respond to Chinese companies on economic terms, including off-board software, censoring Chinese investment and so on.” Guangdong Baoying Electrical and Mechanical Co. , Ltd. general manager of discipline to the “IT Times” reporter revealed that a large domestic mobile phone factory has dozens of Chinese executives through the transfer of Turkey and Germany home, “it is expected that this month there will be nearly a thousand Chinese enterprises charterflights home, direct flights from Delhi to Wuhan, Changsha and other places.” As soon as the manager goes, production will be slower. “
iPhone 11 “Made in india”
On August 1st Mr Prasad, India’s minister of electronics and information technology, said on Twitter that the government had launched a “production-linked incentive scheme” to provide manufacturers and accessories makers with plans to invest in India, such as “fiscal incentives” subsidies.
Mr Prasad said India’s electronics consumer market would see “explosive growth” by 2025, “and they (the shortlisted manufacturers) agreed to export 60 per cent of india’s home-grown products to countries outside India, with an estimated total output of $153bn over the next five years and direct or indirect employment for about 1.2m indigenous Indian workers.” “
Foxconn employees in Chennai, Photo Source/Interviewee.
In July, Foxconn, apple supplier, plans to invest up to $1 billion over the next three years to expand factories in southern India to help assemble more iPhones. In the same month, Apple began making the iPhone 11 at its Foxconn plant in India, the first time the country has produced a top-of-the-line model.
In response to a question about whether to restrict Chinese companies from participating in the Production-Related Incentive Program, Mr Prasad said publicly at a press conference that “the government has not prevented companies from any country from participating in the scheme”.
Chinese mobile phone brand “no care”
Why are Chinese mobile phone manufacturers absent from the list? Yang Shucheng, secretary-general of the Chinese Mobile Phone Enterprise Association, thinks that perhaps Chinese manufacturers “don’t care.”
“The Indian government has had a similar policy before, but there is little chance of a 100 per cent cash-out. At present, the Indian government’s incentive policy only stays in the conceptual stage, coupled with the long-term work of Chinese enterprises in India, the local market and policy environment is very well understood, so choose not to participate in the so-called policy incentives. “
Indian street shops are filled with advertisements for Chinese mobile phone brands.
Referring to the production and sales of Chinese mobile phone manufacturers in India, Mr Yang said: “Sales are good at the moment, with china’s mobile phone brands accounting for more than two-thirds of the total.” The current outbreak affected, production capacity is only half of the same period last year. The main reason is still afraid of employees infected, so recruitment difficulties. “
On August 4th, the number of new cases in India reached 52,051, the highest number in the world. At present, India has more than 1.85 million confirmed cases and 38,971 deaths. India ranks 7th in the world in the number of outbreaks.
Firmly in the majority of the Indian market.
The absence of this incentive policy will have a big impact on domestic mobile phone manufacturers, Yang said: “It is still up to the market to speak.” “
Samsung’s share of the smartphone brand in India fell sharply to 72 per cent in the second quarter from 81 per cent in the first quarter, according to the latest survey by market research firm Counterpoint Research, with samsung brands appearing to benefit, with shares up 10 per cent.
However, Chinese mobile phone brands still account for four of the top five sales in India, with Xiaomi, Vivo, Realme and OPPO having market share of 29 per cent, 17 per cent, 11 per cent and 9 per cent respectively.
Photo source/Counterpoint Research.
A Chinese living in India, Xiaomi in India’s mobile phone market share and recognition are very high, “some Indians also think Xiaomi is an Indian brand.” “
The Economic Times of India argues that policies such as “associated incentive schemes” and “made in India” and “self-reliant India” will make it difficult to shake the position of Chinese smartphones in the Indian market in the short term. This is particularly true in the market segment, which sells for less than 15,000 rupees (about Rmb1,400).
“Chinese smartphones, with their unparalleled price-performance advantage, have almost no rivals in this market.” “After tensions between China and India, a lot of people are trying to find alternatives to Chinese products, ” an anonymous Indian industry executive told local media. But it is almost certain that india’s home-grown manufacturers and international brands will struggle to do so in the smartphone industry, and China has almost 60 to 70 per cent of the right to export key handsets. The lack of some key accessories light results in the overall price of the finished product floating, heavy results in product quality decline. “
But the industry executives also pointed out that if chinese brands in India’s market space is all squeezed into the low-end model market, it is likely to form a Chinese brand “internal competition” situation.