Xiaomi, Oppo, Vivo may move some export production from China to India

Chinese smartphone brands, Xiaomi, Oppo, and Vivo have reportedly agreed to export devices made in India to their other markets — a move that could cut a major chunk of manufacturing output from their Chinese facilities. Meanwhile, it will be a boost to the Indian government’s Make in India programme, which has so far attracted leading global manufacturers.

According to The Times of India, this is a major win for the government’s efforts as this would be the first time that Chinese smartphone companies agreed to share their global production volumes with India after rejecting it outrightly several times earlier. This could also mean there is a shift in the manufacturing strategy of the three companies.

Xiaomi, Oppo, and Vivo have chalked out plans to start exporting phones they manufacture in India. Two other major smartphone brands, Samsung and Apple already export some of their important devices from India to other markets. The report said the potential overseas markets for the India-made phones of Xiaomi, Oppo, and Vivo would be Africa, the Middle East, Latin America, and some parts of Europe, in addition to India’s neighbouring countries like Pakistan.

This could also be an outcome of the strict restrictions the government had imposed to discourage investments from China in India after the pandemic and the Galwan Valley skirmish. It became difficult for smartphone companies to continue with their investment in India, especially without any incentives for the government’s efforts to make India a global manufacturing hub.

Moreover, the government’s production-linked incentive (PLI) schemes could also be a major reason why the three companies budged over. These schemes offer manufacturers special benefits for manufacturing locally — something both Apple and Samsung enjoy, as well. The report cited multiple sources to say that Xiaomi, Oppo, and Vivo were also under “increased pressure” from the government to export devices. Local manufacturing firms such as Optiemus Infracom and Dixon may already be discussing “deals and agreements” for export production.

Moving some of the export manufacturing business from China to India may also help brands appease the government after recent incidents. Xiaomi, Oppo, and Vivo, all three brands are under the government’s scrutiny for their business and associated finances in India.

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