India is considering banning budget Chinese smartphones

Everyone loves a good bang-for-buck smartphone, especially when your budget isn’t very high. That’s perhaps why plenty of people around the world find themselves using cheap budget smartphones, more often than not from China. Brands like Realme, Xiaomi and their sub-brands Redmi and Poco have long been on the forefront of budget smartphones, especially in India—though that might change soon.

According to Bloomberg, people close with the issue have revealed to them that the government is considering banning Chinese smartphone manufacturers from selling smartphones in India priced below ₹12,000 (~RM671.81). This would be a major blow towards these Chinese companies in what is the world’s second largest smartphone market. It comes following concerns that these budget-focused brands are undercutting Indian companies.

Right now, the state of New Delhi has already begun a crackdown on these Chinese companies, paying close attention to their finances. They’ve also accused firms such as Oppo and Vivo—part of the BBK Group—as well as Xiaomi of money laundering. Just last week, Rajeev Chandrasekhar, the Indian junior minister for IT claimed that these Chinese smartphone makers achieved their huge market share in India not on the basis of free and fair competition. It doesn’t help that a lot of these Chinese firms don’t actually make a profit in India despite their leading position, causing further uproar in India.

Companies like Apple and Samsung, who are more commonly found in the premium smartphone market, are unlikely to find themselves affected by the budget smartphone ban. Other brands who are likely to find themselves benefitting from the move are domestic Indian smartphone manufacturers such as Lava, Karbonn and MicroMax, with these brands formerly making up almost half of all smartphone sales in India before the rise of China’s cheap and cheerful mobiles.

In comparison, a ban on budget smartphones under ₹12,000 would severely hurt the bottom line of companies like Xiaomi. The Indian smartphone scene is currently the Chinese giant’s most crucial market, with two out of every three Xiaomi-made smartphone in India priced below ₹12,000. They also make up for a quarter of the budget smartphone sector in India currently, and a ban might mean Xiaomi would sell up to 25 million fewer smartphones in India.

That being said, the Indian government will need to tread a fine line here. While their intention with the budget smartphone ban might be to boost their local smartphone industry, they will need to also ensure that they do not completely ward off Chinese companies. Instead, the idea seems to be that hopefully Chinese companies would end up investing into other sectors of the Indian economy. As of now though, we’ll have to wait and see if the Indian government goes through with the move.

[ SOURCE 2 ]