Govt’s import duty effect? Xiaomi, Nokia to make smartphone components in India

In a move that could bring billions to the revenue and create jobs, the Chinese manufacturer, Xiaomi is set to make smartphone components in India and urges its suppliers to set up shop in the country. 

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The entire first week of April, Xiaomi has been on a spree announcing various new initiatives for India, making it a new entrant in the Make-in-India hopefuls. PM Modi’s flagship drive is sure to get a lot of drive as the Chinese consumer electronics manufacturer will open three new smartphone factories in India. The plants will be located across campuses in Andhra Pradesh and Sriperumbudur, Tamil Nadu, and in partnership with Foxconn. These plants should take Xiaomi’s count to six smartphone manufacturing plants in the country.

Recently, Nokia manufacturer HMD also announced that it will set up smartphone components manufacturing units in India.

In another important development, Xiaomi’s surface mount technology plant in Chennai will manufacture printed circuit board assembly units. Surface mount technology lets components to be embedded on the PCBs that are important to a smartphone and adds to almost half of the value.

In early March, the central government imposed a 10 percent tax on import of key smartphone components including PCBs.

Xiaomi has also urged the suppliers to invest and set shop in the country. If it comes through, that would mean a revenue of USD 2.5 billion and creation of close to 50,000 jobs in the country. Indian market is also crucial to Xiaomi as the sub-continent is its second largest market after China. And after Xiaomi recently overtook Samsung to be the best smartphone brand in the country, the initiatives become much important and will hopefully reduce the lack of stock problems for the brands.