The government has stepped into the field to rush the free movement of Chinese smartphone brands in India. The central government of India has come up with a strategic proposal to regulate the activities of Chinese mobile companies in the country. The government has asked prominent Chinese mobile brands including Xiaomi, Oppo, Realme and Vivo to tie up with Indian companies for their local operations. The government’s move is seen as an attempt to involve Indian stakeholders more in the operations of these mobile companies in the country’s domestic market.
Indian government is going to introduce new rules for Chinese mobile manufacturers
According to a report in The Economic Times, in a meeting organized by the Ministry of Electronics and Information Technology, both Chinese smartphone companies and the India Cellular and Electronics Association (ICEA) were informed about the central government’s concerns. Issues related to Chinese mobile brands doing business in India were at the heart of the discussion. Also, as part of efforts to regulate and promote inclusion of Indian stakeholders, the central government has requested Chinese mobile handset companies to appoint Indian officials in key positions such as Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Technical Officer (CTO). .
Again, Chinese mobile makers have been instructed to engage Indian contract manufacturers and increase local manufacturing by expanding component levels by partnering with Indian firms. The central government has emphasized the need for joint ventures with Indian organizations to facilitate this expansion. Besides, companies are urged to increase their exports from India and build local distribution networks. These measures are aimed at encouraging domestic manufacturing, creating employment opportunities and enhancing India’s place as a manufacturing hub for the mobile industry.
Here the question may arise why the government is introducing new rules for Chinese handset firms? In fact, due to allegations of tax evasion, new rules have been introduced for Chinese smartphone makers in the Indian market. Several Chinese smartphone brands are currently under investigation for their financial practices. The government has been keen to create a business-friendly environment to ensure fair competition and address concerns raised by offline retailers regarding aggressive online discounting.
The new rules are intended to encourage Indian equity partners to be involved not only in manufacturing but also in sales and marketing of these Chinese companies. The government aims to create a more balanced and transparent business environment through the participation of Indian stakeholders. Currently, Chinese smartphone brands have established huge prestige in India, but these new rules will make them more liable in the Indian industry.