India plans to restrict the sale of Chinese smartphones priced below 12,000 rupees ($150) to boost the domestic industry, Bloomberg reported on Monday. While the potential move could provide much-needed relief to Indian smartphone manufacturers, which have been facing intense competition from their Chinese competitors, it would hurt Chinese companies, which have been raising concerns about arbitrary restrictions placed by the Indian government. In fact, the Indian government has taken a series of recent measures against Chinese tech companies, citing national security concerns.
It would also result in Chinese companies like Xiaomi and Realme losing their huge market share. Chinese firms have been able to corner the world’s second-largest mobile market due to their ability to price their products lower than domestic manufacturers. Global presence, years of experience, and improving profit margins have allowed Chinese companies to cut prices without affecting gains.
Furthermore, excluding Chinese companies from participating in the lowest segment of the Indian smartphone market would force them to compete with high-end brands like Apple and Samsung. It would also allow Indian companies to enter this niche market and provide them with space to grow.
The move comes at a time when the Indian smartphone market is expected exponentially grow in the coming years. The Indian government fears that if not restricted, Chinese companies would continue to corner the field, preventing Indian manufacturers from benefiting. According to estimates, India will have one billion smartphone users by 2026.
Guess what all Smartphone Brands might get banned?
— Amit Bhawani (@amitbhawani) August 8, 2022
News - India likely to ban Chinese companies from selling smartphones under &undefined;12,000. As per the report coming from Bloomberg.
The bigger question is if Indians would buy from Lava, Micromax and others?
In February, income tax officials raided the offices of Chinese tech giant Huawei in Gurugram and Bengaluru. The income tax raids were part of India’s recent crackdown against Chinese tech companies. For instance, in January, Chinese company Xiaomi was made to pay an additional $87.8 million in unpaid import taxes. The Income Tax department has also conducted raids against several other Chinese companies in the past year, including Oppo and Xiaomi.
India has banned over 320 Chinese apps, including TikTok, Free Fire, Tencent Driver, Nice Video Baidu, PUBG Mobile, WeChat, and Viva Video Editor, since June 2020, citing national security concerns. New Delhi accused these applications of collecting “sensitive user data” that was being misused and transmitted to servers “located in a hostile country.”
India has been cracking down on Chinese tech companies and banning Chinese apps since violent clashes between Indian and Chinese border forces in the Galwan Valley in June 2020 killed 20 Indian soldiers.
In response, the Chinese government has increasingly complained of discrimination, saying Chinese companies are unfairly and arbitrarily being singled out.