Why the government may ban budget Chinese smartphones in India, is it another wave of crackdown on China

The Government may ban Chinese smartphones costing less than Rs. 12000 in order to give boost to homegrown brands.

Chinese smartphone manufacturers such as Oppo, Vivo, Xiaomi and others have been dominating the Indian smartphone market for years now. Chinese manufacturers had managed to offer the hardware and the user experience at the price point in order to woo customers in various segments. It appears that the domination of these companies may end soon, in the budget smartphone section as the government may soon ban Chinese smartphones that cost less than Rs 12,000. 

Why the Indian government may ban budget Chinese smartphones

The Government of India is reportedly planning to ban Chinese smartphones that cost less than Rs.12,000 in order to give a needed boost to homegrown brands such as Micromax, Lava, Karbonn and others. According to those familiar with the situation, the initiative aims to drive Chinese telecom companies away from the second-largest mobile market’s lower price range. There’s a potential to change the dynamics of the budget smartphone market in India whose huge growth has almost been in sync with the rise of Chinese brands in India.  

According to a Bloomberg report citing sources that came out on Monday, the country “seeks to restrict Chinese smartphone makers from selling devices cheaper than Rs 12,000 ($150) to kick-start its faltering domestic industry”. 

Commenting on the report, Navkendar Singh, associate vice president, device research, IDC India, South Asia and ANZ, said that it may not be easy to implement this decision and that it may also leave customers with fewer choices. “It will be immensely challenging to execute this operationally in the market”. 

Who would suffer the most

Indian smartphone makers have been struggling ever since companies like Xiaomi and Oppo flooded the market with inexpensive Android devices. It will be a huge blow for these companies as they currently hold 50% of the market share in India in the  sub Rs.12000 and below segment as per the Counterpoint Research. 

There has been no denial or confirmation from the Government of India yet. 

What if the budget Chinese smartphones are banned

If the government’s plans materialise, brands like Xiaomi and Realme, which hold about 50% of the sub-$150 (Rs 12,000 and under) market share in India, may suffer a fatal blow.

“In light of Jio PhoneNext’s recent growth, Chinese brands account for 75–80% of these volumes. Realme and Xiaomi presently hold a 50% market share in this sector,” Pathak told IANS.

Chinese smartphone players now sell the vast majority of devices in India, but their market dominance has not been “on the basis of free and fair competition,” India’s junior tech minister told the Business Standard newspaper last week

It’s obvious that some of the most cost-effective and functional products will see price increases, but that merely delays what will eventually happen. Having said that, this situation provides a great boom for Indian mobile phone manufacturers like Micromax, Karbonn etc to reinvent themselves.

This story has not been edited by News Mania staff and is published from a syndicated feed

Photo: Internet