India has shifted focus on the nation’s domestic smartphone industry. In order to make homegrown brands popular again, the Indian government wants to restrict Chinese smartphone makers from selling devices under Rs 12,000. Hence, dealing a fatal blow to budget-ruling brands like Xiaomi, Oppo, and Vivo. However, homegrown brands like Micromax, Lava, and others will benefit a lot from it.
The government of India aims to push Chinese giants out of the low-budget smartphone segment. According to sources, the decision will make it more challenging for the Chinese smartphone players in the country. According to Business Standard, the decision coincides with mounting concern about higher volume brands like Realme undercutting local manufacturers.
A tough time for Chinese smartphones in India
Furthermore, a report from Bloomberg cites sources that came out and declared that the government is making a stringent move to boost the Indian smartphone manufacturers. If the government’s ambitions are realized, it will be bad for businesses like Xiaomi and Realme.
They, according to Counterpoint Research, have roughly 50% of the sub-$150 (Rs 12,000 and lower) market share in India. Shipments of smartphones priced under $150 accounted for up to 80% of the sales volume in India. That too during the three months ending in June 2022.
Xiaomi and its rivals Oppo and Vivo have already been exposed to intense financial examination by New Delhi. This has resulted in tax demands and claims of money laundering. The government has already used covert methods to outlaw communications equipment made by ZTE Corp.
Wireless carriers are encouraged to buy alternatives even though there is no formal policy that forbids the use of Chinese networking equipment.
The scenario in the country was different earlier. Before new competitors from the neighboring country shook the market with affordable and feature-rich smartphones, domestic manufacturers like Lava and Micromax accounted for slightly less than half of India’s smartphone sales. However, it’s not the case anymore.
Most smartphones are currently sold in India by Chinese companies. Still, the junior IT minister of India told Business Standard last week that their market domination was not “based on free and fair competition.” Despite their dominant position, most Chinese handset manufacturers in India consistently incur annual losses, which fuel accusations of unfair competition.
Will brands like Micromax make a comeback?
Homegrown brands like Lava and Micromax have had a rough couple of years. Chinese manufacturers started providing better alternatives at reasonable prices in the Indian market. It resulted in a drastic shift in preferences.
If the companies meet the consumer requirements and provide an attractive price point, it should result in better sales. However, consumers will still have budget options from the likes of Samsung. What are your thoughts on this? Do you think it is a wise decision?