According to sources, the Indian government is considering whether to impose limitations on Chinese smartphone manufacturers' ability to sell their goods for less than Rs 12,000, or around $150. The objective may be to support domestically made companies like Lava and Micromax, among others. In the low-cost smartphone category, sometimes known as the sub-Rs 15,000 price range, Samsung and a few other non-Chinese companies have been able to gain some market share. However, this market segment will now be dominated by India's ban on Chinese phones.
Chinese Phones Ban in India
In an effort to boost its struggling domestic market, India wants to stop Chinese smartphone makers from selling devices for less than Rs 12,000 ($150). This would be a serious setback for businesses like Xiaomi Corp.
Those who are familiar with the issue claim that the attempt is being made in an effort to drive Chinese enterprises out of the least competitive area of the second-largest mobile market in the world. [Reference required] They stated it was related to a rising concern that big-volume companies like Realme and Transsion were undercutting regional manufacturers, but they begged not to be identified since it was a delicate subject.
Xiaomi and its rivals have become more dependent on India to support their development as a result of a string of Covid-19 lockdowns that have crippled their home market. These businesses would suffer if they were shut out of India's entry-level market. Up to 80% of all smartphone shipments in India during the three months up to June 2022, according to industry researcher Counterpoint, were for devices costing less than $150. The volume of these exports made up one-third of the nation's overall sales.
Government Plans Chinese Phones Ban in India
Our calculations reveal that Xiaomi's smartphone shipments might drop by 11–14% annually, which is equivalent to 20–25 million units, and sales could drop by 4% if India approves a rule banning Chinese-made mobile phones with retail prices under $150. Sources claim that it represents 25% of the industry in India, Xiaomi is largest international market, with 66% of its devices costing less than $150. The nation where Xiaomi had the most success marketing its goods abroad is India.
New Delhi has already conducted a detailed financial assessment of Xiaomi and its rivals Oppo and Vivo. These acts have also led to the filing of money laundering allegations. The government has already utilised covert means to restrict the sale of telecom equipment made by ZTE Corp. and Huawei Technologies Co. Although there is no official legislation that forbids the use of Chinese networking hardware, wireless operators are being pressured to obtain alternatives.
How will it impact other smartphone manufacturers in India?
Apple Inc. and Samsung Electronics Co. shouldn't be impacted by the adjustment due to the higher prices at which they sell their phones. Representatives from Xiaomi, Realme, and Transsion were contacted by us, but they didn't respond to our inquiries. In a similar vein, the Ministry of Technology in India's spokespeople did not respond to inquiries from Bloomberg News. Just under half of India's smartphone sales were created by domestic companies like Lava and Micromax before new rivals from a neighboring country upended the industry with affordable and feature-rich phones.
India upped the amount of pressure it put on Chinese companies following a skirmish between the two nuclear-armed adversaries on a disputed Himalayan frontier in the summer of 2020 that resulted in the deaths of more than a dozen Indian troops. Over 300 applications have now been blocked as a result, including WeChat by Tencent Holdings Ltd. and TikTok by ByteDance Ltd. The action is being taken as relations between the two countries continue to worsen.
Government of India May be Ban Chinese Mobile Phones Under Rs 12000
Chinese companies have dominated 75-80% of these volumes as Jio PhoneNext has scaled over the course of the preceding few quarters. With a combined 50% market share, Realme and Xiaomi are currently in a dominating position, according to Pathak.
With its headquarters in Shenzhen, Transsion Holdings is a significant rival in the country's low-end and budget market segment. Among the brands it represents are Infinix, Tecno, and Itel. With brands including Itel, Infinix, and Tecno, Transsion Group had a 12 percent market share of the Indian smartphone market in the second quarter of 2018.
Itel topped the sub-Rs 6,000 smartphone segment with a remarkable 77 percent market share, while Tecno finished in second place in the country's sub-Rs 8,000 smartphone market, according to Counterpoint Research.