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The Indian government has no plans to restrict Chinese companies in the entry-level smartphone market, top government officials said.
“We are not considering any such proposal at the Ministry of Electronics and Information Technology,” said a person familiar with the development in the government, in response to reports suggesting that the government intended to restrict Chinese players from selling phones below ₹12,000. spanning the entry-level and affordable mobile phone segments in smartphones and feature phones.
Chinese companies captured 63% of India’s smartphone market, with the likes of Xiaomi, Realme, Oppo and Vivo taking four of the top five spots, according to data from Counterpoint Research for the quarter ended June.
Chinese firms have a 75-80% share in the sub-$150 segment, which contributes to 31% of the total smartphone market. Most Chinese companies manufacture in India and supply to the market is largely covered by local production.
According to industry insiders, the government has been alerted to the declining share of local players such as Lava, Micromax, Karbonn and Intex in the Indian market, with the industry seeking policy measures and support to create “Indian champions”.
However, many of these companies do not have the production scale or marketing power to compete with their Chinese counterparts.
“Implementation of such a ban will have its own implementation challenges as India is an open channel market and it may not be easy for the remaining players to fill the gap with products in their portfolio,” said Navkendar Singh, deputy representative. – President of Devices Research at IDC in India, South Asia and ANZ.
“A total ban is unlikely, but blanket restrictions on certain players based on a segment can lead to an unstable ecosystem. Less than ₹12,000 is roughly a $5 billion category and only two or three local players currently cannot take it overnight,” said Tarun Pathak, research director at Counterpoint Research. He added that Indian brands need a strong portfolio, distribution and sales service mix, which was currently missing.
