Chinese Smartphone Makers Talking To Domestic Contract Manufacturers With PLI Nod

Chinese handset makers are in talks with domestic smartphone makers, in a bid to leverage the Production Linked Incentive (PLI) scheme-approved status of the Indian manufacturers. 

The talks between the Chinese handset makers and the Indian local brands revolve around forming joint ventures. ( Representative image: Getty )

Chinese handset makers such as Oppo, Xiaomi and Transsion are in talks with domestic smartphone makers like Lava Internationa, Dixon Technologies and Bhagwati (Micromax), among others, in a bid to leverage the Production Linked Incentive (PLI) scheme approved status of the Indian manufacturers, the media has reported. 

The talks between the Chinese handset makers and the Indian local brands revolve around forming joint ventures, says a report by The Economic Times, quoting a senior government official. "A lot of these talks are in the due diligence stages", the report added.

Homegrown brand Bhagwati Products Ltd, which is also a unit of Micromax, is in advanced talks with two Chinese smartphone OEMs, including Shenzhen-headquartered Transsion Holdings, to get their handsets manufactured locally for the domestic market as well as for exports.

"We are in an advanced range of discussions with two Chinese companies. So, once that happens, we will be able to achieve 200-300 per cent of our target under the PLI scheme," Rajesh Agarwal, director, Bhagwati Products, was quoted as saying by the ET report. 

To recall, the Indian government's push with multiple PLI schemes is said to be showing a positive impact and "we saw increased local manufacturing share in product segments like smartwatches, TWS, neckband and tablet, said Counterpoint Research report in September.

While Oppo led the "Make in India" smartphone shipments with a 24 per cent share, followed by Samsung and Vivo, Lava led the feature phone shipments with 21 per cent share.

"Oppo recently announced the Vihaan initiative under which it plans to invest $60 million in the next five years to empower the local supply chain. Samsung also increased its manufacturing with the premium segment smartphones, especially the Galaxy S series," Prachir Singh, Senior Research Analyst at Counterpoint Research, had said in a statement.

In the smartphone segment, in-house manufacturing contributed to almost 66 per cent of the total "Make in India" shipments in the June quarter, while the rest of the 34 per cent shipments came from third-party EMS (electronics manufacturing services) players. Among the third-party EMS players, Bharat FIH, Dixon and DBG were the leading players during the quarter.

Padget Electronics (396 per cent YoY), Wistron (137 per cent YoY) and Lava (110 per cent YoY) were the fastest-growing smartphone manufacturers during the quarter in terms of shipments.