India imposes new conditions on Chinese smartphone manufacturers, requiring Indian officials to hold positions of power

India requires Chinese smartphone manufacturers to have Indian officials in positions of power

【PhoneAuto News】Recently, PhoneAuto noticed that India has proposed new conditions to Chinese smartphone manufacturers, requiring Indian nationals to hold positions such as CEO.

According to the Indian Economic Times on the 13th, the Indian government has requested that Chinese smartphone manufacturers such as Xiaomi, OPPO, realme, and vivo appoint Indian nationals as CEO, COO, CFO, and CTO. Additionally, the Indian government has instructed them to outsource contract manufacturing to Indian companies, develop manufacturing processes that involve local businesses, and export through local distributors. Furthermore, government officials have specifically instructed Chinese companies to comply with the law and not evade taxes in India.

India proposes new conditions to Chinese smartphone manufacturers

It is understood that Indian government officials raised these issues at a recent meeting held by the Ministry of Electronics and Information Technology, attended by Chinese companies such as Xiaomi, OPPO, realme, and vivo.

It is noteworthy that the detention of 5 billion yuan of Xiaomi’s funds by the Indian law enforcement agency has attracted continued international attention. According to reports, the Indian law enforcement agency has recently issued formal notices to Xiaomi’s Indian subsidiary, company executives, and three banks, accusing them of illegally transferring funds abroad and violating the Foreign Exchange Management Act (FEMA). The appellate authority froze 55.51 billion rupees (approximately 4.8 billion yuan) of Xiaomi’s funds last year in accordance with India’s foreign exchange law. As a reference, this amount is equivalent to 57% of Xiaomi’s net profit last year, a huge amount. In response to this matter, Xiaomi also responded by stating: “Xiaomi adheres to legal and compliant operations worldwide and complies with relevant laws and regulations in its place of operation.”

Market research firm Counterpoint data shows that in the first quarter of 2023, the total shipment of mobile phones in the Indian market was 31 million, a year-on-year decrease of 19%. Among them, vivo maintained the second position with a market share of 17%, Xiaomi’s market share was 16%, OPPO’s was 12%, and realme’s was 9%.

Experts said: “Chinese companies have a crushing market share in India compared to other competitors. If India wants to take measures against mobile phone manufacturers, the primary target will definitely be Chinese companies.” It can be seen that in recent years, Chinese mobile phone manufacturers have emphasized localization manufacturing in India and have recruited some Indian employees locally.

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