Top Chinese brands to shift some export production from China to India
By MYBRANDBOOK
Top Chinese companies such as Vivo, Oppo and Xiaomi have agreed to export India-made devices to countries around the world, giving away a slice of critical manufacturing output from their Chinese factories.
Export of the Made-in-India smartphones by Chinese companies would mean a shift in their manufacturing strategy as it will perhaps be the first time that they share their global production volumes with India and open up their world markets, something that they have steadfastly refused to do till now.
As per reports, all the three top Chinese makers have now finalised elaborate plans to begin exports from India — mirroring the steps taken by American giant Apple and Korean Samsung — and potential overseas markets could be in Africa, the Middle East, Latin America and even Europe, apart from neighbouring countries.
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.
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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