“Report: Xiaomi Raises Concerns Over Indian Scrutiny of Chinese Firms, Unsettling Suppliers”
In a bid to address mounting concerns within the Indian smartphone industry, Xiaomi, one of China’s leading tech giants, has penned a letter to New Delhi expressing unease among suppliers regarding the heavy scrutiny of Chinese companies by the Indian government. This move comes amidst escalating tensions between the two nations following a 2020 border clash, which has significantly impacted investment plans and operational dynamics.
In a bid to address mounting concerns within the Indian smartphone industry, Xiaomi, one of China’s leading tech giants, has penned a letter to New Delhi expressing unease among suppliers regarding the heavy scrutiny of Chinese companies by the Indian government. This move comes amidst escalating tensions between the two nations following a 2020 border clash, which has significantly impacted investment plans and operational dynamics.
Xiaomi, which commands the largest share of India’s smartphone market at 18%, outlined its apprehensions in a letter dated February 6, urging Indian authorities to consider implementing manufacturing incentives and lowering import tariffs on certain smartphone components. The company, known for assembling smartphones in India primarily with local components while importing the remainder from China and elsewhere, emphasized the need for policy reforms to foster a conducive environment for the sector’s growth.
The letter, addressed to the IT Ministry in response to queries on developing India’s component manufacturing sector, highlighted the challenges faced by Chinese firms operating in India, particularly in the smartphone segment where critical components are often sourced from Chinese suppliers. Xiaomi’s India President, Muralikrishnan B, underscored the necessity for “confidence-building” measures to encourage component suppliers to establish operations locally.
While the letter refrained from naming specific companies, it alluded to concerns related to compliance and visa issues, urging the government to address these apprehensions and instill confidence among foreign component suppliers. Notably, Xiaomi and the IT Ministry have refrained from providing further information or comment on the matter.
The Indian government’s heightened scrutiny of Chinese businesses, triggered by the 2020 border clash, has resulted in regulatory actions against several Chinese companies. India has accused firms like Vivo Communication Technology of breaching visa rules and alleged significant fund siphoning. Additionally, over 300 Chinese apps have been banned since 2020, and projects by Chinese automakers have been halted.
Executives of Chinese electronics companies reportedly face challenges in obtaining visas to India, while investments encounter slow clearances due to New Delhi’s stringent scrutiny. Xiaomi’s letter also advocated for the further reduction of import tariffs on sub-components like batteries, USB cables, and phone covers, suggesting that such measures could bolster India’s manufacturing competitiveness.
In light of recent developments, including New Delhi’s recent move to reduce import taxes on battery covers and phone camera lenses, Xiaomi’s call for policy reforms underscores the urgency of addressing industry concerns. Moreover, top Indian officials have hinted at the possibility of easing scrutiny on Chinese investments if border tensions between the two nations remain subdued.
As the Indian government navigates its approach to Chinese investments and regulatory oversight, Xiaomi’s letter serves as a pivotal reminder of the need for balanced policies that foster innovation, investment, and competitiveness in India’s burgeoning smartphone industry.
Sources By Agencies
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