The Indian government’s efforts to ensure the success of the Made-In-India policy may have scored a big hit. Chinese companies Oppo, Vivo, and Xiaomi have agreed to start exporting Indian-made smartphones to the global market. This shift in manufacturing strategy is a huge boost to India. The central government has continued to pursue a strategic policy that aims to make India a global manufacturing hub for smartphones and electronics.
Previously, the Chinese brands had steadfastly refused to open up their operations to export outside India. The new move is a victory for the government and offers India a slice of the global manufacturing output of these companies. The move sees the companies shifting some of their export volume from their Chinese factories to India. Reports indicate that the three companies have finalized plans to begin exporting products from India. This move aligns with the steps taken previously by Apple and Samsung in India. The potential destinations for Indian-made products include Asia, Africa, the Middle East, and Latin America.
There is a combination of factors that could be driving the move of the three Chinese companies. These factors include more stringent policies against Investments from China and the Production-Linked Incentive (PLI) scheme. In addition, Chinese telecommunication companies are not on the preferred list of suppliers with several of them facing tax investigations. The PLI scheme offers incentives for Indian-driven production and export. These local manufacturers are the major beneficiaries of government deals and agreements.
The move by Oppo, Vivo, and Xiaomi to come under the PLI regime will not see automatic access to the benefits. The government has said such moves will require its approval. Vivo has already made moves to export from India. It however recently saw its $15 million worth of exports blocked by the regulator. Vivo says the move will not alter its plans to get exports out of India. Both Xiaomi and Oppo are also making inroads into the operation. The policy environment in India shows that there is a move to stimulate exports. The Chinese big three companies were focused on the local market, while their Chinese factories focused on the global market.
The Indian government plans to expand its economy beyond $5 trillion and an export-driven market is a key driver of such a move. All three Chinese tech companies say they are aligned with the goals of the government and will pursue investment in that direction.
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