India has no plans to restrict Chinese mobile phone makers

The Indian government has no plans to restrict Chinese companies’ access to the entry-level smartphone market, senior government officials have said.

“No such proposal is under consideration at the Ministry of Electronics and Information Technology,” a person with knowledge of government developments said, in response to reports suggesting the government intended to prevent Chinese gamers from selling phones for less than 12,000, comprising the entry-level and affordable mobile phone segments in smartphones and feature phones.

Chinese companies captured 63% of the Indian smartphone market, with entities such as Xiaomi, Realme, Oppo and Vivo taking four of the top five spots, according to data from Counterpoint Research in the quarter ended June.

Chinese companies have a 75-80% share in the under $150 segment which contributes 31% of the overall smartphone market. Most Chinese companies manufacture in India and the supply of the market is largely ensured by local production.

According to industry insiders, the government has been made aware of the declining share of local players, such as Lava, Micromax, Karbonn and Intex, in the Indian market, with the industry seeking policy measures and support to create “Indian champions”.

However, many of these companies lack the manufacturing scale and marketing capacity to compete with their Chinese counterparts.

“Implementing such a ban will have its own challenges related to its execution, as India is an open-channel market, and the remaining players may not find it easy to fill the void with their portfolio products,” said Navkendar Singh, associate vice president for device research at IDC India, South Asia and ANZ.

“An outright ban is unlikely, but globally restricting certain players on a segment basis could lead to an unstable ecosystem. 12,000 is about a $5 billion category and only two or three local players can’t do it overnight,” said Tarun Pathak, research director at Counterpoint Research. He added that Indian brands need a strong portfolio, distribution and after-sales service mix. , which was currently missing.

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