The Chinese company Xiaomi controls approximately 18% of the smartphone market in India, but cannot be satisfied with the existing working conditions, since its partners face unnecessary bureaucratic barriers when organizing supplies and production of components in India. The country’s authorities received a corresponding appeal from company representatives, which additionally included a request to reduce import duties.
Let us recall that the Indian smartphone market largely relies on locally produced devices due to protective duties on finished products of imported origin. In such conditions, successful localization largely depends not only on the assertiveness of foreign manufacturers themselves, but also on the actions of the local bureaucratic apparatus. According to information Reuters, Xiaomi management appealed to the Indian authorities with complaints about the high bureaucratic burden on its partners, which discourages many companies from localizing their products in India. Xiaomi would also like to receive some financial support measures from the country’s authorities, and at the same time reduce import duties on a number of components for smartphones that are not produced in India.
Xiaomi management sent a letter to the Indian authorities at the initiative of the government of the country, since the latter was interested in receiving feedback in this area of activity. Indian officials, according to the management of the local Xiaomi representative office, should think about building more trusting relationships with Chinese component suppliers who want to localize their production in India. According to Xiaomi representatives, Chinese companies in India face excessive regulatory pressure, and employees have problems obtaining visas to visit the country.
At the end of January, Indian authorities reduced customs duties on battery cases and lenses for optical systems of smartphones, but Xiaomi representatives are now asking to reduce duties on the supply of components for the production of batteries, housing parts for smartphones and USB cables. Without significant subsidies, it will be difficult for component suppliers to produce these components in India, so if the country’s authorities do not want to shell out money to support these projects, it makes sense to reduce duties to reduce the cost of Indian-made smartphones.