The Centre, in India, has urged Chinese mobile phone manufacturers to appoint Indian executives to key positions in their local operations. This directive was conveyed during meetings attended by three executives and is aimed at increasing the involvement of Indian partners in the companies. The key positions include CEO, COO, CFO, and CTO. The government has also instructed these manufacturers to collaborate with Indian contract manufacturers, expand local manufacturing to the component level through joint ventures with Indian businesses, and engage local distributors.
MeitY Meetings and Ongoing Investigations
These developments came about during recent meetings conducted by the Ministry of Electronics and Information Technology (MeitY), where senior government officials discussed various issues with Chinese smartphone manufacturers such as Xiaomi, Oppo, Realme, and Vivo. The MeitY meetings coincided with ongoing investigations into tax evasion and alleged illegal remittances by several Chinese smartphone manufacturers. Offline retailers have also been lobbying the government to prevent predatory online discounting.
Emphasizing Local Talent and Ecosystems
Madhav Seth, Realme’s global business president, acknowledged the government’s desire for companies to tap into local talent and ecosystems. He emphasized that these changes would foster higher value addition within the country and promote self-reliance for businesses. Pankaj Mohindroo, chairman of the industry lobby group ICEA, highlighted the government’s objective to nurture Indian skills and businesses, prioritizing local companies whenever possible.
Government Initiatives and Objectives
The government aims to replace foreign distributors with Indian counterparts and involve Indian partners in manufacturing operations, which currently consist of wholly-owned subsidiaries of Chinese companies in India. Minister of State for Electronics and IT, Rajeev Chandrasekhar, is personally leading these initiatives. The government also intends to avoid granting complete end-to-end control to Chinese companies and encourages them to export devices made in India to generate a positive net foreign exchange impact. Additionally, the government aims to promote a robust offline retail presence for these companies, rather than relying solely on online strategies.
Xiaomi’s Contribution to “Make in India” Initiative
Xiaomi India has significantly grown its business by investing in local talent and developing a core group of Indian managers, leaders, partners, and distributors. The company has been actively involved in the “Make in India” initiative, manufacturing a wide range of smartphones and televisions, including components, within the country.
Government’s Focus on Job Opportunities and Skill Enhancement
The government has urged Chinese firms to hire Indians for replaceable skills, as electronics manufacturing presents ample job opportunities and enhances skill sets. These efforts aim to nurture Indian skills, businesses, and self-reliance while ensuring a fair and competitive market environment.
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