As Chinese firms are facing more and more difficulties world over, situation is not quite different in India, as ties between the two neighboring countries continue to worsen. However, Xiaomi, the biggest smartphone maker in India for 12 consecutive quarters, is deepening its roots in the country, after recently losing this title to Samsung. Xiaomi already manufactures a large percentage of its smartphones in India and is now partnering with two new supply chain partners BYD and DBG to bring production up even further.
This new partnership was announced by the company today and is in line with a lot of Chinese manufactures globalizing their production units as tension between the world and China keeps ramping up. This also has to do with labor demanding more wages back home in China, as well as many countries implementing trade polices that makes it difficult to export our of China into said countries.
While this deal for India was closed recently, BYD and DYG are not strangers as far as Chinese manufacturers are concerned. DBG is a major supplier of other telecom firms in China, while BYD is China’s largest electric car maker. In India, DBG had set up a production plant in Haryana not so long ago which alone would ramp up productions in India by 20%, while BYD’s plant will start operating in Tamil Nadu soon.
This move to further localize production, is being seen as a smart move taken by Xiaomi. The company had been showing its solidarity with India’s “Make in India” campaign since tensions rose between India and China.
While India banned several Chinese apps last year (including TikTok, PUBG, and many others), hardware companies have been able to escape under the radar of the Indian government. However, that may not be the case for long, and thus, Xiaomi is taking actions to ensure that it faces no trouble in India.
The company has a huge market in India and is second only to Samsung in the smartphone market. Hence, India is super important to the company. Since the last five years, Xiaomi has been manufacturing most of its smartphones in India, in partnership with Foxconn and Flex. It also claims that for all its smartphones, it always sources basic parts like motherboards etc. from Indian suppliers itself, which accounts to 75% of the mobiles’ value. This has lead to growth both in Indian economy as well as employment, something that Xiaomi can show the authorities if they were to ever turn on Chinese hardware firms as well.