According to reports, the government of India is mulling over the possibility of placing restrictions on the ability of Chinese smartphone makers to sell their products for less than Rs 12,000, which is equivalent to around $150. The goal may be to encourage domestically produced businesses such as Lava and Micromax, amongst others. Samsung and a few other non-Chinese businesses have managed to win some market share in the budget smartphone class, often known as the sub Rs 15,000 pricing group. However, the Chinese Phones Ban in India will now dominate this market segment.
Chinese Phones Ban in India
India wants to prevent Chinese smartphone manufacturers from selling handsets for less than Rs 12,000 ($150), in an effort to jumpstart its lagging local sector. This would be a significant blow to companies such as Xiaomi Corp.
According to those acquainted with the situation, the effort is being made with the intention of forcing Chinese companies out of the lowest part of the world’s second-biggest mobile market. [Citation needed] They claimed it correlates with a growing concern about high-volume brands such as Realme and Transsion undercutting local makers, but they asked not to be named since they were addressing a sensitive issue.
Due to a succession of Covid-19 lockdowns crippling their home market, Xiaomi and its competitors have increasingly relied on India to fuel their development. These companies would be adversely affected if they were excluded from India’s entry-level market. According to market tracker Counterpoint, shipments of smartphones with a price tag of less than $150 accounted for up to 80 percent of total shipments in India during the three months leading up to June 2022. These shipments accounted for a third of the country’s total sales volume .
Government Plans Chinese Phones Ban in India
If India passes a law prohibiting Chinese-made mobile phones with retail prices of less than $150, our calculations show that Xiaomi’s smartphone shipments might decrease by 11–14% each year, which is equivalent to 20–25 million units, and sales could decline by 4-5%. According to sources, it accounts for 25 percent of the sector in India, which is Xiaomi’s most significant foreign market, with 66 percent of its smartphones priced under $150. India is the country where Xiaomi has the greatest success selling its products internationally.
Xiaomi and its competitors Oppo and Vivo have been subjected to a thorough financial review by New Delhi in the past. Money laundering charges have also been filed as a result of these actions. In the past, the government has used unofficial measures to prohibit the sale of telecom equipment manufactured by Huawei Technologies Co. and ZTE Corp. Wireless carriers are being pushed to acquire alternatives, despite the fact that there is no formal regulation that prohibits the use of Chinese networking hardware.
Will it affect other Smartphone Companies?
Due to the higher prices at which they sell their phones, Apple Inc. and Samsung Electronics Co. should be unaffected by the change. We reached out to representatives from Xiaomi, Realme, and Transsion, but they did not reply to our questions. In the same vein, spokespeople for India’s Ministry of Technology did not reply to requests from Bloomberg News. Before new competitors from a neighboring nation upset the market with low-cost and feature-packed handsets, just under half of India’s smartphone sales were made by homegrown businesses such as Lava and Micromax.
After a conflict between the two nuclear-armed rivals on a contested Himalayan border in the summer of 2020, which resulted in the deaths of more than a dozen Indian troops, India increased the amount of pressure it applied on Chinese businesses. As a result, it has subsequently banned over 300 applications, some of which include WeChat by Tencent Holdings Ltd. and TikTok by ByteDance Ltd. The move comes as ties between the two nations continue to deteriorate.
Banning Chinese Phones under 12000
As Jio PhoneNext has scaled up over the course of the previous several quarters, Chinese brands have dominated 75–80 percent of these volumes. Realme and Xiaomi both own a fifty percent share of this market, which means they now hold a dominant position,” Pathak said.
Transsion Holdings, with its headquarters in Shenzhen, is a significant competitor in the low-end and budget part of the market in the nation. Infinix, Tecno, and Itel are some of the brands the company represents. In the second quarter of 2018, Transsion Group held a 12% market share in India’s handset market, including Itel, Infinix, and Tecno.
According to Counterpoint Research, Tecno came in second place in the sub-Rs 8,000 smartphone sector in the nation, while Itel won the sub-Rs 6,000 smartphone segment with a staggering 77% share of the market.