New Delhi, Aug 8 : The Indian government is believed to be planning to impose restrictions on Chinese-based smartphone companies that sell low-end smartphones (less than $12,000) to give a needed boost to Indian-made brands like Micromax, Lava, Karbonn and many more. According to an Bloomberg report, citing sources, that was published on Monday, the nation “seeks to stifle Chinese manufacturers of smartphones from selling smartphones for less than 12,000 rupees ($150) to boost its struggling local industry”.
The move, according to the report, citing people who are who are aware of the situation could force Chinese manufacturers of smartphones “out of the lower segment of the world’s second-largest mobile market”.
If the government’s plans are true, will deal an ax to companies such as Xiaomi and Realme which have seized around 50% market share in India in the sub-$150 (Rs 12,000 and under) segment, as per Counterpoint Research.
“Overall the sub-$150 smartphones contributed to 31 percent of the total smartphone sales in India in the month of June of this year as compared to 49 percent in the same period in the year 2018.” Research Director Tarun Pathak told IANS.
“Chinese brands account for 75 to 80 percent of these sales because Jio PhoneNext has ramped up in the recent quarters.This market is currently dominating by realme and Xiaomi with 50 percent of the market,” Pathak added.
Shenzhen-based Transsion Holdings, which has brands such as Tecno, Infinix and Itel in its portfolio and is a formidable player in the affordable and low-end segment in the country.
Transsion Group brands (itel, Infinix and Tecno) took 12 percent of the share in the market for Indian smartphones in the second quarter of.
While itel held the top spot in the sub-Rs6,000 smartphone segment with an impressive 77% of the market, Tecno captured the second place in the sub-Rs 8000 smartphone market in the country as per Counterpoint Research.
India has taken a very tough defense against Chinese manufacturers, and the recent raids against Chinese smartphone companies such as OPPO, Vivo and Xiaomi show this.
The Indian government is investigating the possibility of tax evasion that is alleged to have been committed from three Chinese mobile companies -three of them: OPPO, Vivo India and Xiaomi.
OPPO India, Xiaomi India and Vivo India were served notices by the Directorate of Revenue Intelligence (DRI) for evasion of duty Finance Minister Nirmala Sitharaman told the Rajya Sabha last week.
A show-cause demand for the sum of Rs 4,403.88 million has been sent to OPPO Mobiles India Ltd based on an investigation by the DRI, and five instances of Customs duty fraud have been registered against Xiaomi Technology India, Sitharaman stated in an email response.
The DRI found customs duty tax evasion of approximately Rs.2,217 crores through Vivo Mobile India Private Ltd.
A show-cause notice was sent to Vivo India demanding customs duty of Rs.2,217 crore under the regulations of the Customs Act.
Since April 2020 in the year 2020, of a total of 382 foreign direct investment (FDI) proposals that the central government got from Chinese companies, India approved only 80 as of June 29.
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