The Chinese mobile manufacturers, including Xiaomi, Oppo, Realme, and Vivo, have been asked by the Indian government to induct Indian equity partners into their local operations, as the Economic Times reported.
The new rules were directed by the Ministry of Electronics and Information Technology (MeitY) in which the government communicated with these smartphone companies and the India Cellular Electronics Association (ICEA).
The government has also directed them to ensure legal compliance and not to evade taxes in India. Other than this condition, the government has also asked them to appoint Indian executives to key roles, such as Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Financial Officer (CFO), and Chief Technical Officer (CTO).
The government wants these companies to make use of the local talents and make India their export and production base. These companies have also been asked to appoint Indian contract manufacturers, increase local manufacturing down to the component level through joint ventures with Indian businesses, expand exports from the country and have local distributors.
Last month, the government approved the Production Linked Incentive (PLI) scheme for IT Hardware with the aim of attracting investments and promoting the capacity and capabilities of Indian companies.
The budget for the PLI scheme for the period of six years is Rs 17,000 crores. The government said that the target for the investments in the field was Rs 900 crores but increased to Rs 1,600 crores.
China’s share in India’s merchandise imports has declined to 13.79% in 2022 – 2023 from 15.43% in 2021 – 2022, as per the Commerce Ministry.
A decline of around $2 billion in 2022 – 2023 in the imports of electronic goods from China, compared to the same period last year, has happened. The import share from China in electronic goods has also declined to 41.9% in 2022 – 2023 from 48.1% in 2021 – 2022.
