The Centre has requested Chinese mobile phone manufacturers operating in India to involve Indian partners in their local operations. The directive, as conveyed during meetings attended by three executives, includes the appointment of Indian executives to key positions such as CEO, COO, CFO, and CTO, as per a report by The Economic Times. Furthermore, the government has instructed these manufacturers to collaborate with Indian contract manufacturers, expand local manufacturing to the component level through joint ventures with Indian businesses, and engage local distributors.
While some Chinese distributors are currently involved, the government aims to increase the presence of Indian distributors, the report states.
The executives also revealed that Chinese companies have been explicitly advised not to evade taxes and to comply with Indian laws.
These developments arose from recent meetings conducted by the Ministry of Electronics and Information Technology (MeitY), where senior government officials discussed various issues with Chinese smartphone manufacturers like Xiaomi, Oppo, Realme, and Vivo. Representing the manufacturers, the industry lobby group ICEA participated in these discussions.
The timing of the MeitY meetings coincided with ongoing investigations into tax evasion and alleged illegal remittances by several Chinese smartphone manufacturers. Offline retailers have also been lobbying the government to prevent predatory online discounting. In addition to seeking Indian equity partners for sales and marketing, the government aims to involve Indian partners in manufacturing operations, which currently consist of wholly owned subsidiaries of Chinese companies in India.
Madhav Seth, Realme's global business president, acknowledged the government's desire for companies to tap into local talent and ecosystems. He emphasised that these changes would foster higher value addition within the country and promote self-reliance for businesses. Seth refrained from providing further details or confirming the meetings.
Pankaj Mohindroo, chairman of ICEA, highlighted the government's objective to nurture Indian skills and businesses, prioritising local companies whenever feasible. According to Mohindroo, the government seeks to replace foreign distributors with Indian counterparts. He stated that Minister of State for Electronics and IT Rajeev Chandrasekhar is personally leading these initiatives, with industry players taking proactive measures, as reported by ET.
One executive noted that the government intends to avoid granting complete end-to-end control to Chinese companies. They added that Chinese manufacturers should start exporting devices made in India to generate a positive net foreign exchange impact. Additionally, the government aims to encourage these companies to establish a robust offline retail presence instead of relying solely on online strategies.
Xiaomi India has significantly grown its business by investing in local talent and developing a core group of Indian managers, leaders, partners, and distributors. The company has been at the forefront of the "Make in India" initiative, manufacturing an entire range of smartphones and televisions, including components, within the country, according to the report.
An industry executive highlighted that the government has urged Chinese firms to hire Indians for replaceable skills, as electronics manufacturing presents ample job opportunities and enhances skill sets.
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