The Indian government has requested Chinese mobile phone manufacturers operating in the country to involve Indian equity partners in their local operations. In meetings with executives from companies such as Xiaomi, Oppo, Realme, and Vivo, government officials conveyed that Indian executives should be appointed to key positions such as CEOs, COOs, CFOs, and CTOs. Additionally, the government has instructed these companies to collaborate with Indian contract manufacturers, expand local manufacturing to the component level through joint ventures with Indian businesses, and hire local distributors.
Indian Government Seeks Indian Executives in Chinese Companies
The government’s directives also emphasize the need for Chinese companies to comply with Indian tax laws and not engage in tax evasion. The meetings between government officials and Chinese manufacturers took place within the Ministry of Electronics and Information Technology (MeitY) and coincided with ongoing investigations into tax evasion and alleged illegal remittances by several Chinese smartphone manufacturers. Offline retailers have also been involved in advocating against predatory online discounting.
The objective behind these measures is to encourage Chinese companies to leverage local talent and the Indian business ecosystem. The government believes that implementing these changes will lead to greater value addition within the country and promote self-reliance. The Indian Cellular and Electronics Association (ICEA), representing manufacturers, has supported the government’s stance, highlighting the aim of developing Indian skills and companies and involving local entities wherever possible, such as Indian distributors.
Measures to Keep Ball Off the Court for Chinese
The government’s intention is to limit the complete end-to-end control of Chinese companies and encourage them to manufacture devices in India for export, thereby contributing positively to the foreign exchange balance. Additionally, the government expects these companies to establish a stronger offline retail presence rather than relying solely on an online sales strategy.
Xiaomi India, for example, has already invested in local talent and developed a core team of Indian managers, partners, and distributors. The company has embraced the “Make in India” initiative by locally producing a wide range of smartphones and televisions, including components.
The government’s focus on involving Indians in replaceable skills within the electronics manufacturing sector aims to generate employment opportunities and enhance skill sets. The government’s efforts in this regard are being led by Rajeev Chandrasekhar, Minister of State for Electronics and Information Technology.
