Top Chinese smartphone brands are in talks with Indian contract manufacturers to leverage the latter’s production-linked incentive (PLI) scheme approved status. This comes amid a broad push by the Indian government to get smartphone players from Asian neighbors to involve more local players in their manufacturing ecosystem.
A senior industry official said Chinese handset brands such as Xiaomi, Oppo, Vivo and Transsion were in talks with the likes of Bhagwati (Micromax), Lava International, UTL Neolync, Optiemus Electronics, and Dixon Technologies, all of whom have been approved under the PLI scheme.
Some of these talks revolve around forming joint ventures, said the official. “A lot of these talks are in the due diligence stages.”
Home-bred contract manufacturer Bhagwati Products Ltd, a unit of Micromax, is in advanced talks with two Chinese players, including Transsion, to get their handsets manufactured locally for the domestic market as well as for exports.
“We are in an advanced range of discussions with two Chinese companies. So, once that happens, we will be able to achieve 200-300% of our target under the PLI scheme,” Rajesh Agarwal, director, Bhagwati Products, told ET. He did not share the names of the Chinese brands.
Arijeet Talapatra, CEO of Transsion, told ET the company was in talks with an Indian contract manufacturer, but did not disclose the name.
“The 6% cashback incentive is a big benefit for us. If we want to serve consumers better, we must take advantage of the (PLI) scheme,” said Talapatra. “It’s a great scheme, which, somehow, is not directed towards us currently. So, we have to do a joint venture with another brand. We are planning around that.”
“We are talking about 75% production for domestic requirements and the rest for export,” Agarwal said.
He added that Bhagwati is also in discussions with these Chinese companies to bring their component ecosystem to India to further increase local value in addition to generating employment.
“We work with Indian partners in our supply chain as well as distribution network. We will look to strengthen these partnerships, and also explore newer avenues to scale them and foster domestic champions,” a Xiaomi spokesperson told ET.
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