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The Next Big Thing

India’s mobile phone makers woo Chinese firms in push to develop manufacturing hub

PUBLISHED : Monday, 18 May, 2015, 7:01am
UPDATED : Wednesday, 20 May, 2015, 10:07am

India’s mobile phone makers are looking to turn the country into a manufacturing hub for the devices by 2019 with the help of their Chinese counterparts.

A delegation of 14 CEO and founders of leading Indian mobile phone makers attended the recent China Business Forum in Shanghai as part of a government-led initiative to develop the industry in India. 

“We are here to tell the Chinese mobile industries that Indian mobile market is 100 per cent open to them for investment and manufacturing,” Pankaj Mohindroo, national president of the Indian Cellular Association (ICA) and leader of the delegation, told the South China Morning Post in a recent interview.

“To combine India and China's advantages in mobile assembling, manufacturing and design, together we can shake up the world's largest mobile market.”

He said the mission is to engage Chinese mobile makers to help establish a mobile handset manufacturing eco-system in India. The plan is an initiative of Indian Prime Minister Narendra Modi, who has just completed a visit to China where he met top leaders. More than 20 agreements on bilateral trade and investment worth US$10 billion were signed.

Of the around 200 million mobile phones sold in India last year, about 25 per cent are smartphones, according to the ICA. South Korea’s Samsung topped the smartphone segment with about a 25 per cent share, ahead of local maker Micromax.

China’s top smartphone brand Xiaomi recently chose India for its first global phone launch outside China, and has also secured a personal investment from tycoon Ratan Tata, former chairman of the giant Tata industrial conglomerate. The Chinese company said in March it would start manufacturing in India within 12 to 18 months.

Mohindroo said that the Indian mobile phone industry is about three years behind China’s, and that is why more feature phones are sold than smartphones. More than 300 million smartphones were sold in China last year according to iResearch consulting group.

In the next three months the ICA will further reach out to top Chinese mobile phone makers including Xiaomi, Huawei, Lenovo and ZTE. Some of them have shown an interest in moving manufacturing to India, he said, adding that other Chinese brands such as Oppo and Meitu are also on the rise in India.

Meanwhile Indian mobile brand Lava, which sold about 30 million phones last year, has established an R&D centre in Shenzhen with 500 staff to better connect with Chinese makers.

“The trend of Chinese mobile makers going towards the high-end is unstoppable. And it is wiser to move manufacture to India for its cheap labour, just as some of American and Korean brands have done,” said Hari Om Rai, founder of Lava.

 

This article was amended to correct the spelling of the name of Ratan Tata.