Xiaomi says ‘confidence building’ measures needed from India after Delhi’s scrutiny of Chinese firms unnerves suppliers
- Firm seeks more import tariff cuts, incentives on components in letter by Xiaomi India president
- India has closely watched China-linked investments since a border clash between the two countries in 2020
Xiaomi, which has the biggest share in India’s smartphone market at 18 per cent, also asks in the letter dated February 6 that India consider offering manufacturing incentives and lowering import tariffs for certain smartphone components.
The Chinese company assembles smartphones in India with mostly local components and the rest imported from China and elsewhere. The letter is Xiaomi’s response to a query from India’s information technology (IT) ministry asking how New Delhi can further develop the country’s component manufacturing sector.
India ramped up scrutiny of Chinese businesses after a 2020 border clash between the two countries killed at least 20 Indian soldiers and four from China, disrupting investment plans of big Chinese companies and drawing repeated protests from Beijing.
While Chinese companies operating in India are reticent to speak publicly about the scrutiny, Xiaomi’s letter shows that they continue to struggle in India, especially in the smartphone space where many critical components come from Chinese suppliers.
In the letter, Xiaomi India President Muralikrishnan B. said India needed to work on “confidence building” measures to encourage component suppliers to set-up operations locally.
