Chinese smartphone company, Xiaomi, is facing challenges in India, the world’s second-largest smartphone market, despite the highest market share of 18%. Xiaomi has expressed concerns about setting up operations and importing smartphone components due to heavy scrutiny from the Indian government of Chinese companies after a border clash with China. The company has also asked India to consider offering manufacturing incentives by lowering import tariffs for certain smartphone components.
The company, which assembles smartphones in India with local components and imports the rest from Chinese suppliers, faces difficulties in getting its suppliers to set up operations in India due to compliance, visa issues, and other concerns. Xiaomi is asking the Indian government to address these concerns and instil confidence among the foreign component suppliers to encourage them to establish manufacturing facilities in the country. The Chinese smartphone maker also made a case for further reducing India’s import tariffs on sub-components used in batteries, USB cables, and phone covers. The increased scrutiny of Chinese businesses in India, including regulatory investigations and freezing of assets of Chinese companies, has led to a challenging business environment for Xiaomi and companies like Vivo Communication Technology.
The Indian government has scaled back Chinese investments and banned more than 300 Chinese apps, including TikTok, further complicating the business environment for Chinese companies operating in India. Despite efforts by Indian policymakers to signal potential easing of scrutiny on Chinese investments if the border between India and China remains peaceful, Xiaomi has found itself dealing with a difficult business environment in the country.
